CITIC Construction Investment has released a report reiterating its "Buy" rating for XTEP International (01368). The firm projects the company's revenue to reach 14.32 billion, 15.26 billion, and 16.37 billion RMB for 2025-2027, reflecting year-on-year growth of +5.5%, +6.6%, and +7.2%, respectively. The net profit attributable to shareholders is expected to be 1.37 billion, 1.52 billion, and 1.67 billion RMB, with annual increases of +10.5%, +11.1%, and +10.0%, resulting in profit margins of 9.6%, 10.0%, and 10.2%.
In its operational performance report for Q3 2025, XTEP's main brand retail sales experienced low single-digit growth year-on-year, with retail discount levels around 70-75% and inventory turnover of approximately 4 to 4.5 months. Meanwhile, the Saucony brand saw retail sales increase by over 20%. The report indicated that the main brand XTEP's revenue growth was low single-digit, with online growth continuing to outperform offline, and children's products growing faster than adults'. The discounts at the end of Q3 remained stable at 70-75%. As of the end of Q3, the company's channel inventory turnover days stood at 4-4.5 months, unchanged from the previous period.
On the product front, XTEP continues to advance its complete running product line, enhancing store imagery in offline channels and prioritizing outlet store expansion. In Q3 2025, Saucony's revenue growth exceeded 20%, with offline sales maintaining over 30% strong growth momentum, while e-commerce is still adjusting. By the end of September, the number of Saucony stores had reached over 170, an increase of nearly 30 since the start of the year.
Looking ahead to Q4 2025, the following points are noted: 1) XTEP plans to reclaim distribution rights for about 400-500 XTEP stores in H2 2025 and 2026 (approximately 100 in 2025), which is expected to show a short-term impact on revenue; 2) Saucony continues to open offline stores (planning to open 30-50 new offline locations throughout the year) while appropriately reducing low-priced and heavily discounted products online.