15 Jul 2024
Xtep announced its 2Q24 operational results, with retail sales for its Xtep Core Brand recorded a 10% growth YoY, accelerating from HSD YoY growth 1Q24. Offline sales recorded just a LSD YoY growth, due to overall weak consumer sentiment and also suffered from the continuous rainstorm in Southern China region during the period. Retail inventory turnover was at a healthy level of 4 months (1Q24: 4-4.5 months) while retail discount level improved to 25% (1Q24: 25%-30%). We expect both the inventory turnover and retail discount would maintain at this healthy level in 2H24. As for July MTD, retail sales growth maintained at a similar pace as June, didn’t saw significant improvements but still enjoyed a positive growth. The management guided a 10% YoY retail sales growth for Xtep core brand, but listco’s turnover could be lower on the back of improving inventory and discount levels.