Positive profit alert with 2021 earnings up by no less than 70%
Xtep announced a positive profit alert, and is expected to record a significant increase of not
less than 70% in its consolidated profit attributable to ordinary equity holders for the year
2021 as compared to that for the year 2020.
In addition, Xtep also announced the operation data of 4Q2021. Xtep’s core brand products
retail sell-through (including offline and online channels) grew by 20%-25% (mid-teens growth
in 3Q2021), retail discount level stayed at 25%-20%, and inventory turnover was about 4
months, which was flat QoQ. The core brand products retail sell-through increased by more
than 30% in 2021, which was better than a high single-digit growth in the same period last
year. The inventory turnover was about ~4 months, better than ~5 months in 2020. A strong
increase in consolidated revenue for the 2021 driven by: (1) an over 30% growth in core Xtep
brand’s revenue in second half of 2021 due to robust sales orders from distributors following
our successful launch of signature functional and lifestyle products and retail channel upgrade
during the Year; (2) accelerated revenue growth of the core Xtep brand’s e-commerce and
kids’ businesses given the respective completed restructurings from branding, products to
operations. An expansion in the gross profit margin of the core Xtep brand primarily
attributable to (1) our continual effort in product innovations and better product offerings;
and (2) a lower base of comparison triggered by the one-off inventory buy-back in 1H2020.