Xtep (1368) H1 2026 earnings summary

Executive summary

• Revenue for H1 2026 was RMB6,794.9 million, down 0.6% year-over-year, with mass market revenue declining 2.2% and professional sports revenue rising 11.4%.

• Gross profit margin improved by 1.4 percentage points to 46.4%, driven by branding and premiumization strategies.

• Net profit attributable to equity holders was RMB817.9 million, down 10.5% year-over-year, with a net profit margin of 12.0%.

• Interim dividend maintained at HK18.0 cents per share, with a payout ratio of 53.8%.

• Strong financial position with net operating cash inflow up 9.5% to RMB847.3 million and net cash up 36.3% to RMB2,325.8 million.

Financial highlights

• Gross profit: RMB3,154.6 million (+2.6% YoY); operating profit: RMB1,160.9 million (-11.0% YoY); operating margin: 17.1%.

• Net profit: RMB817.9 million (-10.5% YoY); net margin: 12.0% (-1.4 ppt YoY); basic EPS: RMB30.0 cents.

• Net cash and cash equivalents: RMB2,325.8 million (+36.3% from 31 Dec 2025); current ratio: 2.5x; gearing ratio: 10.8%.

• Operating cash flow: RMB847.3 million, up from RMB773.8 million in H1 2025.

• Working capital turnover days increased to 112 days, mainly due to higher inventory and receivables turnover days.

Outlook and guidance

• Focus remains on running and premiumization, leveraging multi-brand strategy to capture both mass and elite segments.

• Channel optimization and DTC transformation to drive operational efficiency and consumer engagement.

• Continued expansion in Southeast Asia and cross-border e-commerce expected to support future growth.

• Ongoing investment in R&D, retail expansion, and international growth, with spending targeted at around 3% of revenue.

• Industry fundamentals remain strong, supported by national health initiatives and robust sports demand.