Chinese Nike rival Xtep expects significant jump in first-half profit and revenue, but shares slide
- K-Swiss owner expects at least 35 per cent jump in net profit and revenue for the year’s first half
- Xtep’s shares rose after the announcement, but closed 2.6 per cent lower at HK$13.68
Chinese sportswear brand Xtep International provided a positive earnings update for the first half on Wednesday, saying it expects to post significantly higher net profit and revenue on the back of higher sales, product innovation and increased brand awareness.
The Hong Kong-listed owner of K-Swiss, Palladium, Supra, PLDM and KR3W said in a filing that net profit and revenue for the six months to June 30 were likely to jump by “not less than 35 per cent” from a year earlier.
Fujian-based Xtep also said in the filing that it saw “an impressive year-on-year revenue growth of over 100 per cent for Saucony under the professional sports segment owing to its strong retail sales particularly in its e-commerce business”.
Xtep shares jumped as much as 3.6 per cent following the announcement, but eventually ended the day 2.6 per cent lower at HK$13.68.
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Xtep, which competes with international brands such as Nike, Adidas and domestic rivals including Li-Ning and Anta, is eyeing annual revenues of 24 billion yuan (US$3.77 billion) by 2025, more than double the 10 billion yuan recorded last year, chief financial officer Ricky Yeung told the Post in April.
In the last two decades, sports shoes and apparel has continued to grow rapidly in China. The nation’s market for sportswear and sporting venues could jump to 5 trillion yuan by 2025 from 3 trillion yuan in 2020, according to a recent forecast by Zheshang Securities.
