China’s Xtep International Holdings Ltd. revenues in the first half declined 0.6 percent to RMB 6,794.9 million ($989.3 mm) as a slight decline in its core Xtep brand offset double-digit gains at its licensed Saucony business.
Xtep holds the licensing rights to Saucony and Merrell, both owned by Wolverine Worldwide, in Mainland China, Hong Kong, and Macau.
Revenues in the Mass Market segment, which features the flagship Xtep brand, decreased 2.2 percent in the half to RMB 5,919.9 million ($861.9 mm). Xtep brand’s e-commerce and kids business “continued to record solid growth, alongside an active channel optimization,” according to Xtep’s financial statement.
In the Professional Sports segment (Saucony, Merrell), revenues grew 11.4 percent to RMB 875.0 million ($127.4 mm). Xtep said the gains were mainly attributable to continued e-commerce growth and the execution of its “premiumization strategy, delivering high-quality growth.”
Gross profit margin in the half expanded by 1.4 percentage points to 46.4 percent, fueled by “strengthened branding of the core Xtep brand and the ongoing premiumization strategy of Saucony.”
The Mass Market segment’s margins improved to 45.1 percent from 43.6 percent a year ago, primarily driven by e-commerce and kids business, with an increasing mix of functional products. Gross margins in the Professional Sports segment improved to 55.5 percent from 55.2 percent due to improved discounting on flagship products and expanding economies of scale in apparel and lifestyle offerings.
Operating profit declined 11.0 percent to RMB1,160.9 million from RMB 1,304.8 million.
Operating profit in the Mass Market segment dropped 7.3 percent to RMB 1,119.9 million. Xtep said the lower profits in part reflect higher associated operational costs, including logistics costs and online platform fees, to support e-commerce growth, as well as an increase in DTC-related costs tied to the accelerated channel shift toward a DTC model.
Professional Sports segment’s operating profits rose 15.5 percent to RMB90.8 million due to efficient cost management and expanding economies of scale.
The Corporate segment reported an operating loss of RMB 49.8 million compared to a profit of RMB18.6 million in 2025, mainly attributable to higher share-based payment expenses of RMB 42.9 million, compared with a reversal of RMB 21.1 million in expenses recorded in the same period of 2025.
Business Review
The company said Xtep continued as the top-ranked brand for participant wear rates across all major domestic marathons as the company looks to take advantage of China’s “expanding running market.” In the first half of 2026, the Xtep brand secured the highest wear rate among participants at several flagship events, including the Xiamen, Chongqing, Wuhan, Wuxi, and Meishan Renshou marathons.
Saucony maintained a leading presence among international brands in wear rate across the five major marathons, highlighted by top-three wear-rate rankings at both the Xiamen and Wuhan Marathons.
For the Xtep brand, the 160X championship running shoe series secured “outstanding results” in the half, with Feng Peiyou breaking the Chinese national record wearing the model and finishing as the fastest Asian runner at the Tokyo Marathon. He Jie ranked first among Asian athletes at the Seoul Marathon.
Recent launches for the Xtep brand include the 160X 8 series and more accessible Qing Yun”collection in the run category. Xtep also introduced the Fei Shi hiking collection and the Zhui Shan trail running series to capitalize on China’s “booming outdoor sector.”
Xtep said the Xtep brand continues to pursue “channel optimization” with a focus on increasing its shopping mall footprint while expanding DTC. Xtep said, “Strengthening our DTC operational model not only boosts brand accessibility and customer loyalty, but also optimizes resource allocation across key operational dimensions. By establishing a streamlined, data-driven information flow that connects production directly with the end-consumer, we can react to market signals in real time, refine our product offerings agilely, and consistently deliver high-quality products that resonate with our audience.”
As of June 30, there were 6,308 Xtep adult branded stores, mainly operated by authorized distributors in China, against 6,357 at the close of 2025.
Xtep said e-commerce “remained a core growth engine for the Group in the first half of 2026,” contributing over one-third of the core Xtep brand’s revenue. Major platforms, Douyin and JD.com, saw revenue growth exceed 20 percent. Following its expansion into offline retail channels in February, sales volume for Xtep’s flagship “2000 KM” series surged over 70 percent.
At its X Young kids sportswear brand, Xtep said it continues to “solidify our authority in the children’s athletic segment. By pairing innovative product technology with health-centric initiatives, the brand empowers young athletes at every developmental stage, reinforcing market leadership while unlocking sustained market expansion.”
Launches for the X Young brand include the “A+ Pro Growth Sneaker 2.0,” “100ES 2.0” and the “100ES 2.0.” X Young became the exclusive official sportswear partner of Juste Debout, the street dance competition, in China. As of June 30, there were 1,455 X Young stores in the Chinese Mainland, down from 1,488 at the close of 2025.
Xtep said in China Saucony continues to benefit from “strategic premiumization initiative elevating product innovation, refining retail channels, and launching high-impact marketing campaigns.”
Xtep added, This evolution has successfully expanded Saucony’s reach beyond elite runners to captivate discerning, elite consumers.”
In the first half of 2026, Saucony opened more flagship stores in top-tier malls across key cities, “enhancing both market prestige and consumer accessibility.” Saucony operated 180 stores in China as of June 30.
Openings include Saucony’s first “image” store, which opened in June in Hong Kong at K11 Art Mall. Xtep said, “Spanning 1,700 square feet, the space fuses the brand’s iconic river heritage with local running and street culture, offering technical gear alongside regional exclusives. Through the strategic expansion of its retail footprint and product offerings, Saucony solidifies its role as a key growth engine for the group.”
Saucony served as the official Gold Partner of the “Hood to Coast China Relay” for the sixth consecutive year, with Saucony-sponsored teams taking first and second place. Launches in the half including the “Triumph 24,” “Endorphin Azura,” and “Endorphin Pro 5” all received “enthusiastic market acclaim.” In lifestyle offerings, Saucony introduced the “Kinvara 1” collection, debuted the second chapter of its “Running Artist Collection” with artist Chris Martin, and introduced a co-branded “Endorphin Pro 5” racing shoe with Minted New York.
Merrell in China debuted its third collaboration with Snow Peak while also introducing the “Speed Arc Matis Gtx” waterproof hiking shoe. In lifestyle products, Merrell partnered with Khakis, the South Korean apparel brand, on a “Moab 3” co-branded range and introduced the “Relay Web 1TRL” low-profile shoe.
Chairman’s Statement
The following is a statement from Ding Shui Po, Xtep’s chairman:
..In the first half of 2026, despite persistent global geopolitical uncertainties, China’s economy continued to demonstrate resilience, with gross domestic product and total retail sales of consumer goods growing by 4.7 percent and 1.3 percent, respectively. Amid a volatile macroenvironment and competitive landscape, the Group remained committed to its strategic priorities, focusing on improving operational efficiency while strengthening its foundation for sustainable growth. Driven by increasing government support, the overall scale of sports consumption continued to broaden. Running remained one of the fastestgrowing segments and demonstrated exceptional momentum in 2026, with record-breaking registration numbers across major domestic marathons, further underscoring the resilient and sustained sports demand. Capitalizing on this robust market momentum, the Group remains firmly focused on the running sector. By leveraging the core Xtep brand to deepen mass market penetration while targeting the premium market with Saucony, the Group has achieved comprehensive coverage across both mass market and elite runners. This strategy further unleashed brand synergies while significantly amplifying the overall value of our strategic focus.
Performanxce Review
In the first half of 2026, the Group’s revenue amounted to RMB6,794.9 million. Revenue of the core Xtep brand decreased modestly by 2.2 percent to RMB 5,919.9 million. Revenue of the professional sports segment increased by 11.4 percent to RMB 875.0 million. The Group’s gross profit margin grew by 1.4 percentage points to 46.4 percent. Profit attributable to ordinary equity holders of the Company amounted to RMB 817.9 million. Basic earnings per Share were RMB 30.0 cents. The Board has declared an interim dividend of HK 18.0 cents per Share, with an option to receive scrip shares in lieu of cash. The dividend payout ratio increased to 53.8 percent.
Focus On Running With Professiona-To-Mass Influence Strategy
The core Xtep brand remains focused on running, adhering to its “professional-to-mass influence” strategy to solidify its market leadership. In the first half of 2026, the brand maintained leading overall wear rates across major domestic marathons in Xiamen, Chongqing, Wuhan and Wuxi, while empowering Chinese athletes to achieve outstanding results. Feng Peiyou broke the Chinese marathon record at the Tokyo Marathon, ushering Chinese marathon into the “205 era”. Meanwhile, He Jie finished as the fastest Asian runner at the Seoul Marathon, further validating the strength of its technology.
Building on its professional leadership, the core Xtep brand accelerated the mass market expansion by sponsoring high-profile landmark marathons, university races and community running events to broadly engage key consumer groups. Simultaneously, it continued to expand its product portfolio, leveraging flagship running collections such as the “championship running shoe series” and the “Quing Yun” series to drive growth in the running segment and empower mass market runners with advanced technologies. In response to the dynamic market demand, the core Xtep brand proactively optimized its channel structure, accelerating its presence in shopping malls and outlets while further advancing the direct-to-consumer (DTC) transformation. These channel optimization efforts have delivered tangible outcomes, driving operational quality and efficiency, providing consumers with a superior retail experience, and laying a robust foundation for long-term sustainable growth.
Leveraging Premiumization Strategy for High-Quality Growth
As a prestigious running brand with a century-long heritage, Saucony actively advanced its premiumization strategy targeting elite consumers. By prioritizing investments in branding, products and retail channels, Saucony successfully enhanced its store efficiency to support its long-term and high-quality growth. The brand further deepened engagement with sophisticated consumers through organizing exclusive corporate running activities and consistently sponsoring the large-scale running event, “Hood to Coast Relay”. In addition to solidifying its leadership in performance running with flagship models that reinforce its professional sports image, Saucony also catered to the diverse lifestyle needs of elite consumers in the premium market. Through accelerating its expansion into lifestyle, original series, and apparel offerings, the brand continues to pioneer industry trends and drive business scale.
Saucony prioritized offline channel optimization by opening new image stores in prime commercial locations across higher-tier cities to boost store efficiency. In June 2026, Saucony celebrated the launch of its first image store in Hong Kong, which delivered above-expectation results. Meanwhile, the brand executed strict pricing strategy and controlled the discount on signature offerings to safeguard its premium positioning and foster healthy long-term growth.
Prospects
The government’s goal of developing China’s sports industry beyond the scale of RMB7 trillion by 2030 has imparted solid and tangible growth momentum into the market, further bolstering our confidence in the future prospects of the Group and the industry. Amid growing public health awareness, consumer demand for sports products remains robust. In particular, running continues to represent one of the most resilient growth drivers in the sports industry, delivering rapid growth sustained by surging interest and record-high marathon participation.
Propelled by supportive policies and market momentum, the Group’s strategic focus on running has become increasingly defined. As the number one running brand in China, our years of deeply rooted presence in this segment has established solid competitive edge. The Group will deploy multi-brand portfolio to precisely address diverse customer demand, while enhancing product competitiveness by leading R&D and leveraging channel optimization alongside DTC transformation to achieve market share growth and operational excellence.
The Group’s steady performance amid ongoing reforms reflects the dedication and professionalism of our employees, and I would like to extend my sincere gratitude for their efforts. Furthermore, I am also deeply appreciative of our shareholders for their unwavering trust and support despite market dynamics. Looking ahead, the Group will continue to strive for excellence, deliver enhanced results and unlock higher value for our stakeholders.
Image courtesy China Xtep International Holdings, Ltd
