XTEP International Holdings Limited reported total revenue of RMB 14.151 billion for 2025, representing a year-on-year increase of 4.2%. After excluding the impact of discontinued operations (K·SWISS and Palladium), profit attributable to ordinary equity holders reached RMB 1.372 billion, a 10.8% increase that set a new historical high. In terms of business structure, revenue from the core "XTEP" brand was RMB 12.515 billion, with growth slowing to just 1.5% year-on-year, a further deceleration from 2024. In contrast, the professional sports division, comprising Saucony and Merrell, grew 30.8% to RMB 1.636 billion, with operating profit increasing 46.4% to RMB 114 million, outlining a "second growth curve."
Facing a trend of peak sales growth for its main brand, XTEP International's strategic transformation has become increasingly urgent. The company is drawing on the successful experience of Saucony's Direct-to-Consumer (DTC) transition, intending to replicate it on a large scale within the main brand's sales channels. XTEP stated plans to reclaim distribution rights from approximately 400 to 500 authorized distributor stores in the second half of 2025 and throughout 2026, aiming to enhance operational efficiency by directly operating flagship stores. To support this, in February 2025, XTEP International raised HKD 1 billion, primarily for further developing the DTC business model for both the XTEP main brand and Saucony.
However, pressures on the channel from this transition are beginning to show. The channel inventory turnover days for the XTEP main brand extended from "approximately 4 months" in 2024 to "approximately four and a half months" in 2025. Analysis suggests the slower turnover may be influenced by multiple factors, including the decline in the main brand's retail growth rate and a "channel stockpiling" effect ahead of the DTC transition.
Concurrently, the Group's gross profit margin for continuing operations in 2025 was 42.8%, a slight decrease of 0.4 percentage points year-on-year, reflecting some pressure on profit margins during the process of increasing direct retail investment and clearing inventory.
Global performance emerged as a highlight for XTEP in 2025. Overseas business revenue nearly doubled, with cross-border e-commerce sales surging over 220%, driven strongly by major Southeast Asian platforms like Shopee, TikTok, and Lazada. During the year, XTEP opened its first overseas running club in Singapore and partnered with Malaysia's Bonia to launch a running flagship store, signaling a shift in its overseas strategy from primarily online penetration towards omnichannel expansion.
Positioned in the highly competitive sporting goods sector, XTEP is reinforcing its image as "China's premier running brand" to stabilize its core business. In 2025, the Group deepened its connection with professional runners by sponsoring 74 running events and expanding its running club network by 71 locations. On the product side, offerings like the "160X 7" series and the "Qingyun" series enabled comprehensive coverage from elite racing to the mass market.
For XTEP, while the strategic focus following the divestiture of loss-making operations is beginning to yield results, inventory management and improving store efficiency under the DTC model remain core challenges for the coming year. The ability to translate profit growth into a sustainable brand moat will ultimately depend on the company's practical control over its end-channel operations.
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