Topsports International Holdings, Ltd. (Group), a China-based retail operation with Nike and Adidas as principal brand partners, is reporting that the global political and economic landscape was fraught with complexities and uncertainties during the six-month first half (H1) period ended August 31. Still, China’s economy maintained an overall trajectory of steady growth momentum for the period , bolstered by macro policy framework.

The company also manages retail operations in China for other (non-principal) brands, including Puma, Converse, Vans, The North Face, Timberland, Asics, Hoka, Skechers, and the NBA and other brand partners.

Topsports trades and reports in the Chinese Renminbi (RMB), or Yuan currency.

The China Landscape for Active Lifestyle Brands
In the first half of 2025, China’s domestic Gross Domestic Product (GDP) registered a year-over-year y/y growth of 5.3 percent. Specifically, with regard to the textile and apparel industry, the sector exhibited a composite trend defined by “moderate domestic sales upturn, export headwinds, online recovery, offline divergence.” This, combined with the prevailing characteristics of Chinese residents’ consumer confidence during the same period – namely “stabilization at a relatively low level, structural divergence, and a restructuring of expenditure patterns” – led to a moderate year-on-year growth of 2.5 percent in the textile and apparel segment within the overall total retail sales of consumer goods. While this growth rate was slightly higher than that of the corresponding period last year, it remained notably below the growth rate of the overall total retail sales of consumer goods during the period.

The company said in its H1 report that while the broader retail landscape remains challenging, the “resonance effect” – driven by policy dividends, occasion segmentation, and value upgrading – has unlocked opportunities for the sports footwear and apparel industry to transcend traditional growth boundaries and embrace diversified expansion.

“During the period, we witnessed a deeper penetration of ‘self-fulfilling’ sports lifestyles,” company management noted in the H1 report. “Activities such as camping, hiking, cycling, and yoga have gained widespread traction, as consumers turn to sports for physical relaxation and mental rejuvenation.” 

Competitive outdoor sports and small-ball games have reportedly seen remarkable growth, according the company, with enthusiasm for pursuits like trail running, skiing, and tennis remaining high, due in part to their social appeal and competitive thrill continuing to fuel public participation.

H1 Business Review
The company said the broad sportswear sector continued to grapple with common challenges, such as disruptions to macro demand, volatility in offline operating conditions, and consumer confidence that stabilized at a low level – paired with a fragmented spending structure.

The Group’s revenue decreased by 5.8 percent year-over-year (y/y) to RMB12.3 billion. Supported by its omni-channel retail capabilities, the year-over-year growth of the online retail business partially mitigated the foot traffic pressure on the offline retail business.

 

Brand Trends
Principal brands include Nike and Adidas. Other brands include Puma, Converse, VF Corporation’s brands (namely Vans, The North Face and Timberland), Asics, Onitsuka Tiger, Skechers, NBA, Li-Ning, Hoka, Kailas and Ciele Athletics. Principal brands and other brands are classified according to the Group’s relative revenue.

Online Penetration
Topsports had over 800 accounts on Douyin and WeChat Channels at the end of the first half, more than 3,600 Mini Program stores, and over 3,700 stores onboarded to instant retail platforms. During the period, sales on Douyin reportedly maintained the top position in the platform’s Sports & Outdoor category rankings. The company’s private domain Mini Program also retained the No.1 spot in the Sports & Outdoor category of Tencent’s officially released WeChat Popular Mini Programs rankings. In the same period, sales from the company’s online retail business (covering both public and private domains) achieved double-digit y/y growth.

Stores in Operation

 

Gross Margin
Group gross profit margin was said to remain” generally stable” in H1, edging down 10 basis points y/y to 41.0 percent of net sales. Given the relatively prevailing promotional intensity in China’s overall online retail market for sports footwear and apparel, combined with the increased share of the Group’s online retail business in total sales during the period, the discount rate for the period widened year-over-year, which exerted a negative impact on the gross profit margin. The higher proportion of the retail business’s contribution to total revenue during the period, along with the support from brand partners amid the volatile market environment, was said to jointly provided positive support to the gross profit margin.

Selling & Distribution and General & Administrative Expenses
While the weakened offline retail foot traffic during the period posed negative operating de-leverage pressures on traditional offline store operations, the Group mitigated this impact by leveraging the continuous expansion and refinement of its omni-channel retail network. This reportedly encompasses the ongoing optimization of the offline retail store network, as well as the further expansion of the online retail layout, which boasts a relatively more favorable cost structure.

During the period, Selling & Distribution expenses and General & Administrative expenses decreased 5.5 percent y/y, with the corresponding expense ratio slightly increased by10 basis points to 33.2 percent of net sales. This was said to demonstrate the Group’s prudent expense control mindset and execution amid a volatile market environment, as well as the flexibility and operational efficiency driven by its omni-channel retail network layout.

Net Profit
The profit attributable to the company’s equity holders decreased 9.7 percent y/y to RMB789.1 million, with the profit margin attributable to the company’s equity holders declining by 30 basis points y/y to 6.4 percent of net sales.

Balance Sheet and Cash Management
Cash was said to be the cornerstone of a company’s long-term sustainability.

As of 31 August 2025, the Group’s Cash & Cash Equivalents amounted to RMB2.54 billion, among which net cash generated from operating activities was RMB1.35 billion.

Dividend
Based on the H1 results, the Group’s Board has resolved to declare an interim dividend of RMB13.00 cents per ordinary share for the financial year ending 31 August 2025, with a dividend payout ratio of 102.2 percent. Amid a volatile market environment, the Group has maintained a high dividend payout ratio that outperforms the industry average, fully demonstrating its firm and proactive approach to rewarding shareholders through steady cash generation.

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