Xtep (1368) H1 2025 earnings summary

Executive summary

• Revenue rose 7.1% year-over-year to RMB 6,838 million, with net profit attributable to equity holders up 21.5% to RMB 914 million and EPS at RMB 34.55 cents, driven by strong growth in both mass market and professional sports segments.

• Operating profit increased 9.1% to RMB 1,305 million, with operating profit margin improving to 19.1%.

• Interim dividend per share increased by 15.4% to HKD 0.18, maintaining a 50% payout ratio.

• Net cash and cash equivalents nearly doubled to RMB 1,913 million, reflecting strong liquidity.

• Maintained leadership in China's running sector, with flagship products, marathon sponsorships, and professional-to-mass influence strategy enhancing brand dominance.

Financial highlights

• Gross profit grew 6.9% to RMB 3,074 million, with gross margin stable at 45.0%.

• Net profit margin rose to 13.4% from 11.8% year-over-year.

• Return on equity (annualized) reached 19.7%, up 3.3 percentage points year-over-year.

• E-commerce contributed over 30% of core brand revenue, achieving double-digit growth.

• Net asset value per share rose 9.6% to RMB 3.55.

Outlook and guidance

• Strategic focus on running and direct-to-consumer (DTC) model to drive long-term growth.

• Saucony to expand with new flagship stores and lifestyle collections, targeting premium market growth.

• Professional sports division's full-year operating profit margin expected to remain at mid to high single-digit level.

• Inventory levels expected to normalize by year-end after strategic build-up for peak season and new brand launches.

• Optimism for H2 2025 driven by rising health awareness, government incentives, and resilient sportswear demand.