Chinese sportswear maker Xtep International (1368) reported on Tuesday its first-half net profit declined 10.5 percent year-on-year to 818 million yuan (HK$953.7 million), dragged by lower revenue and higher operational costs in its mass market segment.
The company maintained an interim dividend at 18 HK cents per share.
Chief financial officer Dona Ding said the company is facing headwinds in the third quarter, and forecasted a slight decline in full‑year revenue, as the core brand's operating margin would come under pressure, stemming from rising logistics and platform fees amid e‑commerce growth as well as higher expenses tied to accelerated Direct‑to‑Consumer channel reforms.
Xtep's revenue dipped 0.6 percent to 6.79 billion yuan, among which the core Xtep brand sales slid by 2.2 percent to 5.9 billion yuan and that from the professional sports segment increased by 11.4 percent to 875 million yuan. Revenue of overseas business more than doubled, driven by strong momentum in crossborder e-commerce and the strategic rollout of new image stores across Southeast Asia.
Gross profit margin expanded by 1.4 percentage points to 46.4 percent, fueled by strengthened branding of the core Xtep brand and the ongoing premiumization strategy of Saucony, a brand in its professional sports segment, according to the company's filing document.
Shares of Xtep International closed 6.16 percent higher at HK$3.79 on Tuesday.
Saucony prioritized offline channel optimization by opening new image stores in prime commercial locations across higher-tier cities to boost store efficiency. In June 2026, Saucony launched its first image store at K11 Art Mall in Hong Kong, which delivered above-expectation results, the company said.
Chairman and chief executive Ding Shui-po noted that the company's crossborder e‑commerce business will keep gaining traction, with the Americas as a key focus market backed by its value‑for‑money product proposition. The company will expand its physical retail footprint across Southeast Asia in the second half with the Middle East on its future expansion roadmap.
As of end-June, there were 6,308 Xtep Adult and 1,455 X Young branded stores in China and overseas. Saucony recorded 180 stores in China.
Frank Feng
