21 Mar 2025
Xtep’s FY24 revenue was up by 6.5% YoY to Rmb13,577m, mainly driven by i) steady growth of 3.2% YoY from core brand Xtep to Rmb12,327m due to the strong growth from online channels of ~20% YoY which accounted for over 30% of core Xtep total revenue; and ii) S&M sales rose by 57% YoY to Rmb1,250m, accounted for 9.2% of the Xtep’s sales in FY24 (6.2% of FY23 revenue), with strong growth mainly driven by the higher product popularity and strong retail performance with double-digit SSSG and robust online sales growth. Overall GPM was up by 1.4ppt YoY to 43.2% mainly driven by the full acquisition of S&M and therefore able to capture the full margins, in which S&M’s GPM rose 17.2ppt YoY to 57.2% in FY24, slightly offset by a 0.2ppt YoY drop in core brand’s GPM to 41.8%. On the cost side, S&D ratio edged up 0.3ppt YoY to 21.1% on the rise in the A&P cost ratio from 13.3% in FY23 to 13.4% in FY24, alongside with an increase in platform fees associated with higher online sales and DTC related expenses, while admin ratio was up by 0.3ppt YoY to 10.5% on higher staff costs amid increase in consultancy service fee on optimization projects. As a result, FY24 NP surged by 20.2% YoY to Rmb1,238m, inline with our estimates. Xtep declared a final-DPS of HK9.5 cents, representing a full year payout ratio of 50%.