CITIC Construction Investment: Maintains "Buy" Rating for XTEP INT'L, with Saucony brand retail sales exceeding 20% growth in Q3 2025
CITIC Construction Investment maintains a "Buy" rating for XTEP INT'L, expecting revenues for 2025-2027 to be 14.32 billion, 15.26 billion, and 16.37 billion yuan respectively, with net profit attributable to the parent company at 1.37 billion, 1.52 billion, and 1.67 billion yuan. In the third quarter of 2025, the retail sales of the main XTEP brand grew low single digits year-on-year, while the retail sales of the Saucony brand grew over 20%. The XTEP brand plans to reclaim distribution rights for approximately 400-500 stores in the second half of 2025, while the Saucony brand will continue to open offline stores
According to the Zhitong Finance APP, CITIC Construction Investment has released a research report maintaining a "Buy" rating for XTEP INT'L (01368), expecting the company's revenue for 2025-2027 to be 14.32 billion, 15.26 billion, and 16.37 billion yuan, with year-on-year growth of +5.5%, +6.6%, and +7.2%; net profit attributable to the parent company is projected to be 1.37 billion, 1.52 billion, and 1.67 billion yuan, with year-on-year growth of +10.5%, +11.1%, and +10.0%, and profit margins of 9.6%, 10.0%, and 10.2%, respectively. The company released its operational performance report for the third quarter of 2025: In Q3 2025, the retail sales of the main brand XTEP experienced low single-digit year-on-year growth, with retail discount levels around 70-75% and inventory turnover of about 4-4.5 months. The retail sales of the Saucony brand grew over 20%.
The report states that in Q3 2025, the main brand XTEP's sales growth was low single-digit, with online growth continuing to outpace offline, and children's products growing faster than adults. The terminal discount in Q3 2025 remained between 70-75%, unchanged from the previous quarter. As of the end of Q3, the company's channel inventory turnover days were 4-4.5 months, stable from the previous quarter. The product line continues to promote a full range of running products, while offline channels are continuously upgrading store images and focusing on outlet layouts. In Q3 2025, Saucony's sales grew by over 20%, with offline still maintaining a strong growth momentum of over 30%, while e-commerce is still adjusting. As of the end of September, there were over 170 Saucony stores, an increase of nearly 30 stores since the beginning of the year. Looking ahead to Q4 2025: 1) The main brand XTEP plans to reclaim distribution rights for about 400-500 XTEP stores in H2 2025 and 2026 (about 100 stores in 2025), which is expected to have a short-term impact on revenue; 2) The Saucony brand will continue to open offline stores (planning to open 30-50 new offline stores throughout the year) and appropriately reduce low-priced and heavily discounted products online
