Revenue of 14.1 billion, but the stock price collapsed: Why does no one believe in Xtep's "growth"?

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“Xtep, not a normal kind of feeling” — the advertising slogan that once swept across China alongside Stephen Chow now seems to be taking on another meaning: non-standard growth anxiety.

On March 27, Xtep International (01368.HK) opened lower, with the stock down more than 5% at one point during the trading session. Yesterday (March 26), after Xtep International released its 2025 results, the stock plunged more than 9% at one point, hitting a near one-year low. At yesterday’s close, the decline was still as much as 7%. With a financial report showing revenue of 14.15 billion yuan, net profit of 1.37 billion yuan, and growth in both, why did investors “vote with their feet”?

Core pillar “loses momentum”: an awkward 1.5%

The financial report shows that as of December 31, 2025, Xtep International’s revenue increased 4.2% year over year to 14.151 billion yuan; profit attributable to ordinary equity holders increased 10.8% year over year to 1.372 billion yuan. In the report, Xtep International attributed growth to the “steady performance of the Xtep main brand” and the “strong growth of the professional sports segment.”

But in 2025, the Xtep main brand’s revenue grew only 1.5% year over year, the lowest in recent years. In 2024, the figure was still 3.2%, and earlier periods saw growth in the double digits. Retail sales maintained low single-digit growth, and even the fourth quarter nearly came to a halt.

The Xtep main brand contributes more than 88% of the group’s revenue. Its “loss of momentum” directly dragged down overall performance—revenue was 14.15 billion yuan, below the market’s estimated 14.38 billion yuan; net profit was 1.37 billion yuan as well, also missing expectations.

At present, the running track has become the industry’s “red sea.” Anta, Li-Ning, and 361 Degrees are all stepping up efforts, and Xtep’s “professional running” advantage is being diluted little by little. On the product side, as competitors’ carbon-plated running shoes have gone through multiple iterations, the Xtep main brand is still dominated by traditional running shoes, lacking breakthrough technology. On the channel side, the days for distributor inventory turnover extended from four months to four and a half months; distributors’ willingness to replenish inventory declined, and market penetration was blocked.

Saucony “can’t carry the team alone”: concerns behind high growth

With the main brand “lying flat,” Xtep’s bright spot comes from the professional sports segment—Saucony + Miler. In this segment, 2025 revenue grew 30.8% year over year to 1.636 billion yuan.

Of this, a two-year-ago acquisition played a key role. At the end of 2023, Xtep acquired Saucony’s joint venture equity in China for 61 million US dollars, turning it into a wholly owned subsidiary. Today, Saucony has opened 175 stores on the Chinese mainland and firmly ranks first in the wearing-rate charts among six key marathon events, including Shanghai, Beijing, and Xiamen.

However, Saucony can’t temporarily save Xtep’s situation.

With revenue of 1.636 billion yuan, it accounts for only 11.6% of the group’s total revenue. With less than 12% of the scale, trying to fill the growth shortfall of nearly 90% of the core business is like trying to bail out water with a cup. What’s more, Saucony’s channel density is far less than that of the main brand—175 stores versus over 6,000, meaning coverage is limited.

Even more worth watching is that while growth is fast, gross margin is declining. The professional sports segment’s gross margin fell from 57.2% to 55.5%, a drop of nearly 2 percentage points. The group’s explanation is that “clothing sales contribute more, and their gross margin is lower than that of footwear.” This means Saucony’s growth depends more on the apparel category, and the profitability of apparel is weaker than that of footwear.

Gross margin under pressure, long cash collection cycle: profit quality discounted

Not only the professional sports segment—gross margin in the mass sports segment also dipped slightly from 41.8% to 41.2%. The decline in overall gross margin directly squeezed net profit space—net profit growth of 10.8% lagged behind revenue growth by 4.2 percentage points.

Compared with peers, Xtep’s gross margin is clearly at a disadvantage. In the first half of 2025, Li-Ning had a gross margin of 50%, while Anta was as high as 62.17%. The gap in gross margin reflects insufficient product pricing power and cost control ability.

Another financial concern is the number of days for accounts receivable turnover. In the first half of 2025, it reached 126 days—far higher than peers such as Anta (20–26 days) and Li-Ning (13–15 days). A long cash collection cycle means pressure on cash flow—the net cash flow from operating activities declined by 6.37% year over year. More seriously, excessively long receivable periods may drag down distributors’ working capital turnover, which in turn affects their willingness to replenish inventory, creating a vicious cycle.

Brand incidents and strategic back-and-forth: the road to repair is long

In recent years, Xtep’s brand image has also been going through turbulence.

The controversy over “controlling the event” at the Beijing Half Marathon in 2024 has not yet fully died down. When Xtep’s contracted athlete He Jie won the race, three African athletes wearing Xtep footwear and apparel finished tied for runner-up, triggering widespread doubts. The organizing committee canceled Xtep’s event partnership status, and years of investment in the events ended up going to waste.

Product quality complaints also trouble Xtep. On the Black Cat platform, there are more than 4,000 complaints related to “Xtep,” mainly concerning issues such as shoe sole glue coming undone and soles coming off after use, as well as clothing becoming misshapen after washing.

Meanwhile, Xtep’s multi-brand strategy was also capped with “selling at a discount.” The companies Gaisaiwei and Palladin acquired in 2019 were sold in 2024 for 151 million US dollars, a discount of 42% versus the 260 million US dollars acquisition price. This buy-in and sell-out not only caused a waste of resources, but also dragged on the development of the main brand.

Ding Shuibo: Can the market leadership position better cope with external fluctuations?

In Xtep’s 2025 financial report, Xtep founder, chairman of the board, and CEO Ding Shuibo said: “A market leadership position can better cope with external market fluctuations.”

But he did not specify what “external market fluctuations” refers to. Perhaps the real fluctuations are happening internally—main brand growth stagnating, the second growth curve not yet taking off, gross margin declining, and brand image being damaged… Any one of these issues is more troublesome than external fluctuations.

For Ding Shuibo and Xtep, the top priority might not be to deal with external market conditions, but first to resolve their own “growing pains.” After all, if even the core pillar is unstable, then no matter how “non-standard” the feeling is, it will be hard to sustain the ambition of a century-old brand.

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责任编辑：郝欣煜