Guotai Haitong Securities has released a research report noting that as Brazil's production reduction takes effect and cotton planting seasons commence in the U.S. and China, March to May represents a critical window for potential catalysts in U.S. cotton prices. The firm remains optimistic about leading yarn manufacturers poised to benefit from the potential upside in U.S. cotton prices, which could enhance their earnings flexibility. Regarding the leading men's wear brand, Biyinlefen (002832.SZ), the report suggests that with increased brand investment in 2025, the company has the potential to release significant performance in 2026. This outlook is supported by the brand's relatively low e-commerce penetration and the steady expansion of its outlet channels, indicating robust potential for sustained growth momentum. The report recommends companies with solid fundamentals and high dividend yields, such as Fuanna (002327.SZ) (with a dividend yield above 6%) and Stella Holdings (01836) (with a dividend yield around 10%). It also recommends undervalued leaders with a unique brand portfolio, such as ANTA SPORTS (02020). The key points from Guotai Haitong Securities are as follows: Recent quarterly revenues and performance for Amer Sports, Deckers, Ralph Lauren, and VF exceeded consensus expectations. In April, China's retail sales of apparel, footwear, hats, and knitted textiles grew by 3.6% year-on-year, showing a slowdown compared to the previous month. Amer Sports, Deckers, Ralph Lauren, and VF all reported quarterly revenues surpassing consensus estimates. Amer Sports reported a 32% year-on-year increase in Q1 2026 revenue, with adjusted net profit attributable to shareholders rising 47% (excluding one-time debt settlement losses), exceeding expectations. Growth was driven by strong performance in professional apparel (Arc'teryx, +33%) and outdoor performance (Salomon, +42%). Revenue in Greater China surged 44.5%, leading growth across all four global regions. The company raised its 2026 revenue growth guidance to 20-22% (previously 16-18%). Deckers reported a 10% year-on-year increase in Q4 FY2026 revenue (8% on a constant-currency basis), with EPS at $0.96, beating the consensus estimate of $0.83. This was primarily due to better-than-expected UGG revenue (+9%), attributed to an extended product sales cycle under its four-season strategy, mainly in DTC channels. HOKA revenue grew by 15%, with international sales increasing by a mid-to-high double-digit percentage. For FY2027, revenue guidance is set for high-single-digit growth, with HOKA expected to grow in the low double digits, and the EBIT margin maintained at the lower end of the 20% range. Ralph Lauren reported a 12% constant-currency revenue increase in Q4 FY2026, significantly exceeding the consensus expectation for single-digit growth. Adjusted EPS was $2.8 (against an expected range of $2.25-$2.45). Revenue growth exceeded expectations in North America (+8%), EMEA (+6%), and Asia (+28%), with Asia leading the growth, particularly China, which saw over 50% growth. The average selling price in Q4 increased by 16%, supported by strong full-price sales, reduced discounting, and optimized channel and product mix, leading to a 0.4 percentage point year-on-year improvement in gross margin. For FY2027, constant-currency revenue is projected to grow by 4-5%, with the EBIT margin expected to improve by 0.4-0.6 percentage points. VF reported a 3% constant-currency revenue increase in Q4 FY2026, with EPS at $0, slightly exceeding the consensus expectation of a marginal loss. Growth was primarily driven by The North Face (+7%) and Timberland (+2%). Vans revenue showed sequential improvement (down 5% year-on-year, compared to a 10% decline in Q3), with Vans Americas returning to positive growth. Additionally, wholesale performance exceeded expectations due to earlier shipments. Geographically, the Americas led with 10% growth, followed by Greater China at 8%, while EMEA faced pressure. VF resumed providing annual guidance, projecting FY2027 constant-currency revenue growth of 1-2%, with an expected recovery in gross margin and a potential decrease in SG&A expense ratio. In April, China's retail sales growth for apparel, footwear, hats, and knitted textiles slowed month-on-month. In April 2026, retail sales for these categories increased by 3.6% year-on-year, decelerating from the 7.0% growth seen in March, though still outpacing the overall retail sales growth of 0.2%. For the January to April period, cumulative retail sales for these categories grew by 8.1% year-on-year. Risks include weaker-than-expected consumer sentiment, fluctuations in raw material prices, and intensifying industry competition.
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