| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | 1649.51 | -62 |
| Graham Formula | 2084.55 | -52 |
Descente Ltd. is a leading Japanese sportswear manufacturer and retailer, renowned for its high-performance apparel and accessories across multiple sports categories. Founded in 1935 and headquartered in Tokyo, the company operates globally under a diverse portfolio of brands, including DESCENTE, le coq sportif, arena, Munsingwear, and Marmot, among others. Descente specializes in winter sports, golf, soccer, cycling, and fitness wear, catering to both professional athletes and casual consumers. With a strong presence in Japan and expanding international reach, the company leverages its heritage of innovation and quality to compete in the highly competitive global sportswear market. As part of the consumer cyclical sector, Descente benefits from trends in health consciousness and outdoor activities, positioning it as a key player in the leisure and sports apparel industry.
Descente Ltd. presents a stable investment opportunity with a market capitalization of ¥327.6 billion and a low beta of 0.361, indicating lower volatility compared to the broader market. The company reported solid FY2024 revenue of ¥126.99 billion and net income of ¥12.01 billion, with a diluted EPS of ¥159.07. Descente maintains a healthy balance sheet with ¥29.24 billion in cash and equivalents and manageable total debt of ¥8.19 billion. The company also offers a dividend yield, with a dividend per share of ¥48. However, investors should consider the competitive pressures in the global sportswear market and potential macroeconomic headwinds affecting consumer discretionary spending.
Descente Ltd. competes in the global sportswear industry, where it differentiates itself through a multi-brand strategy targeting niche sports segments such as winter sports, golf, and cycling. The company's strong brand portfolio, including DESCENTE and Marmot, allows it to cater to both performance-oriented and lifestyle consumers. Descente's competitive advantage lies in its Japanese heritage of precision and quality, which resonates well in Asian markets. However, it faces intense competition from global giants like Nike and Adidas, which dominate in terms of scale, marketing power, and innovation. Descente's smaller size limits its ability to invest in large-scale marketing campaigns or rapid product innovation compared to these behemoths. On the other hand, its focus on specialized sports categories provides a defensible niche. The company's partnership with international brands like le coq sportif and umbro enhances its global distribution but also exposes it to licensing risks. Descente's financial stability and disciplined cost management are strengths, but its growth prospects depend on expanding its international footprint and capturing emerging trends in athleisure and outdoor sports.