Xtep International Holdings reported a 0.6% year-over-year decline in group revenue to RMB 6.795 billion for the first half of 2026, as mass-market sales fell 2.2% to RMB 5.92 billion. The professional sports segment grew 11.4% to RMB 875 million, lifting its share of group revenue to 12.9% from 11.5% in the prior-year period.
Net profit declined 10.5% to RMB 818 million, yet net margin expanded to 12.0% from 13.5% in H1 2025. Gross profit rose 2.6% to RMB 3.155 billion, with gross margin improving by 1.4 percentage points to 46.4%. Mass-market gross margin increased to 45.1% from 43.6%, while professional sports gross margin reached 55.5%. Operating profit in the mass market fell 7.3% to RMB 1.12 billion, compressing margins to 18.9%, but the professional sports segment’s operating profit surged 15.5% to RMB 91 million with margins expanding to 10.4%.
Expenses were contained, with advertising and promotion costs declining to 12.0% of revenue from 12.6%, while research and development spending remained stable at 2.7% of revenue. Net cash surged 36.3% to RMB 2.326 billion, supported by a 9.5% rise in operating cash flow to RMB 847 million. Bank borrowings dropped 41.9% to RMB 637 million, leaving cash and cash equivalents essentially flat at RMB 3.449 billion.
The board declared an interim dividend of HK 18.0 cents per share, equating to a 53.8% payout ratio. Capital expenditure fell sharply to RMB 22 million from RMB 90 million in the prior-year period, while inventory turnover days lengthened to 105 from 77 days at year-end 2025.
Xtep maintained its lead in marathon wear, with combined Xtep and Saucony usage exceeding 39% across major Chinese races. At the Xiamen Marathon, the brands achieved a 54% wear rate, including 45% for Xtep and 9% for Saucony. Athlete Feng Peiyou set a national record of 2:05:58 while wearing Xtep shoes.
The company retained an MSCI ESG rating of “A” and outperformed 84% of textile peers in S&P Global’s ESG assessment. Xtep launched the 160X 7.0 PRO eco-friendly shoe, using recycled PET plastic bottles and reducing carbon emissions by 12.7g per pair, while recycling 92 tons of fabric waste. The group also donated over RMB 14 million in cash and supplies and sponsored 38 marathon events, maintaining 37% female representation in management roles.
Shares rose 6.16% to HK$3.79 following the presentation, trimming the year’s decline from a 52-week high of HK$6.78.
