XTEP's 2025: Main Brand Growth Slows, DTC Challenges Arrive Though Delayed

XTEP INT'L achieved total revenue of RMB 14.151 billion in 2025, a year-on-year increase of 4.2%.

After excluding the profit and loss impact of discontinued operations (K-Swiss and Palladium), profit attributable to ordinary equity holders reached RMB 1.372 billion, a year-on-year increase of 10.8%, hitting a record high.

From a business structure perspective, the revenue of the core "XTEP" main brand was RMB 12.515 billion, a year-on-year increase of only 1.5%, further slowing down compared to the % in 2024.

In contrast, the professional sports segment, comprising Saucony and Merrell, saw a year-on-year increase of 30.8% to RMB 1.636 billion, with operating profit increasing by 46.4% to RMB 114 million, outlining the contours of a "second growth curve."

Facing the trend of sales growth peaking for the main brand, XTEP INT'L's strategic transformation is imminent.

The company is drawing on Saucony's successful experience in DTC transformation, aiming to replicate it on a large scale within the main brand's sales channels.

XTEP has stated its plan to reclaim distribution rights from approximately 400 to 500 authorized distributor stores in the latter half of 2025 and in 2026, to improve operational efficiency by directly operating flagship stores.

To this end, in February 2025, XTEP INT'L raised HKD 1 billion, primarily for further developing the DTC business model for both the XTEP main brand and Saucony.

However, the channel pressure brought about by the transformation has already begun to show.

The inventory turnover days for the XTEP main brand's channels extended from "approximately 4 months" in 2024 to "approximately four and a half months" in 2025. Analysis suggests that the slowdown in turnover may be influenced by multiple factors, including the decline in retail growth for the main brand and the "channel stocking" effect prior to the DTC transformation.

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 that profitability is being squeezed by increased direct investment and inventory clearance efforts.

Globalization has become a significant highlight for XTEP in 2025.

In 2025, XTEP's overseas business revenue nearly doubled, with cross-border e-commerce achieving over 220% growth, strongly driven by mainstream Southeast Asian platforms such as Shopee, TikTok, and Lazada.

During the year, XTEP opened its first overseas running club in Singapore and partnered with Malaysia's Bonia to open a running flagship store, gradually shifting the focus of its overseas layout from online penetration to omnichannel expansion.

Rooted in the highly competitive sports apparel track, XTEP is solidifying its foundation by strengthening its image as "China's number one running brand."

In 2025, the group deepened its connection with professional runners by sponsoring 74 running events and expanding 71 running clubs; on the product side, its "160X 7" series and "Qingyun" series achieved full coverage from elite racing to the mass market.

For XTEP, while the strategic focus after divesting loss-making businesses has begun to show results, inventory control and store efficiency improvement under the DTC model remain core challenges for the coming year.

Whether it can transform profit growth into a long-term brand moat will depend on its actual control over terminal channels.