XTEP International Semi Annual Report: Growth Of 23% To 3 Billion 357 Million, Total Number Of Stores 6312

In the afternoon of August 21st, XTEP (demand area: 80-200 square meters, has been stationed in 125 shopping centers, planned to open 1000 this year) International Holdings Limited released the interim results in 2019. During the reporting period, the group achieved a revenue of 3 billion 357 million yuan (the same below), an increase of 23% over the same period, and a profit of 717 million yuan, an increase of 21% over the same period last year. The profit attributable to ordinary share holders is 463 million yuan, up 23% over the same period last year. The basic earnings per share is 20.19 cents, and the interim dividend is expected to be 12.5 Hong Kong cents per share.

　　 Developing sports events to provide multifunctional sports products

As a sports brand, XTEP international is firmly committed to sports events. XTEP group has sponsored many mainland events for five consecutive years. It is the official partner of the China Athletics Association's marathon and the sponsor of Tencent's XTEP Penguin run. Through sponsoring marathon and running events, organizing XTEP 321 Running Festival, establishing a running club, sponsoring Beijing Olympic Forest Park XTEP runway and other contact consumers, XTEP established a running club, to a large extent, stimulated the participation of consumers, and consolidated the relationship between "running" and XTEP brand.

On the product, XTEP offers two categories of functional and leisure sports products. Among them, functional sports products have high technology aimed at running to enhance their functions and performance; leisure products cater to the prevailing sports and leisure trends prevailing in the market. At the same time, XTEP develops product categories, launching outdoor product line, professional soccer product line, indoor integrated training product line, yoga and fitness products exclusive female product line. The result of product and brand transformation is that the gross profit margin of the group has been increasing year by year.

　　 Revenue growth 23% e-commerce growth

In the first half of this year, XTEP group's revenue was 3 billion 357 million yuan, up 23% over the same period last year. Among them, footwear category is 1 billion 912 million yuan, accounting for 57%; clothing category income is 1 billion 356 million yuan, accounting for 40.4%; accessories category 89 million yuan, accounting for 2.6%.

XTEP pointed out that the main reasons for the growth of performance were: sound product mix and good acceptability (especially clothing products), resulting in higher sales rate and increased replenishment orders from general agents; supplementary demand for healthier stock levels; shop upgrading and zero sale network optimization, and sales performance of downstream retailers was strong.

In e-commerce and O2O, XTEP's e-commerce business grew steadily in the first half of the year, accounting for more than 20% of the group's revenue. The success of the e-business platform is mainly due to the rapid adaptation of the company to the consumer trend and direct management by an executive team of more than 400 professionals. Because of its strong brand positioning and diversified product mix, it has been the first Tmall sales category in second consecutive years in 2019.

　　 The total number of stores is 6312, and the number of shops is 82.

On the distribution network, the number of XTEP retail outlets in mainland China and overseas is 6312, with a total number of 82 outlets. In June 30, 2019, the number of sole agents remained stable in 40 stores, and about 60% of them were directly operated. In order to improve the utilization ratio of resources, XTEP completed the integration of XTEP children and XTEP in the supply chain in 2017 in operation management, brand marketing, product development and production, material procurement, retail management system and retail network.

In the first half of this year, the number of sales outlets in XTEP's children's Department reached 650. Since the contribution of XTEP children to the overall income is negligible, the development of children's brand will be more cautious in the future and will not expand blindly.

Over 80% of shops have been converted into international sports style layout. The new store has an average construction area of more than 105 square meters. It uses a customized design to display a full range of sporting goods series with running characteristics and to increase the rate of joint sales.

XTEP will actively expand its business in the two or three tier cities in mainland China, and expand the scale of stores, modern store image and upgraded customer experience, so as to fully capture the purchasing power of consumers and improve the efficiency of stores.

　　 Vigorously purchasing brands to deepen the development of multi brand operation

In the business mode, XTEP adopts the new strategic plan of multi brand operation. In March 2019, XTEP announced its cooperation with Wolverine Group in developing, marketing and distributing footwear, clothing and accessories in the mainland, Hongkong and Macao. Suo Connie and WAN Le's first independent brand store will open in the first half and second half of 2020 respectively, while Soconi's e-commerce channel sales began in July 2019.

In August 1, 2019, XTEP completed the acquisition of K-Swiss Holdings, Inc, and added two brands of Gestapo and paladin. In the first half of this year, gestus and paladin had business bases in over 80 countries and regions. In the future, Gestapo and paladin will seamlessly integrate with XTEP, greatly improving operational efficiency and shifting the focus of their business to the Asia Pacific region.

　　 epilogue

XTEP said it will continue to enhance its product design and technology to meet current consumers, renovate and expand its store image and achieve natural growth. At the same time, with the help of China's fitness craze, further ploughing in the two or three line cities will meet the demand of local consumers for the rapid growth of professional sports goods. Apart from the local market, it will also seize opportunities in Southeast Asia and other Asian markets and expand overseas business appropriately.