Xtep International principally engages in the design, development, manufacturing, sales,
marketing and brand management of sports products covering footwear, apparel and
accessories for adults and children. With a diverse brand portfolio encompassing the core
Xtep brand, K-Swiss, Palladium, Saucony and Merrell to strategically target the mass market,
athleisure and professional sports segments, has an extensive global distribution network and
more than 8,000 stores in Asia-Pacific, North America and EMEA.
Revenue growth in FY2022 better than market expectations and ahead of peers
In FY2022, Xtep’s revenue rose 29.1% to RMB12,930.4 million (FY2021: RMB10,013.2 million),
slightly better than market expectations, and ahead of peers. Profit attributable to ordinary
equity holders of reached RMB921.7 million (FY2021:RMB908.3 million), a slight increase of
1.5%. Net profit margin amounted to 7.1% (FY2021: 9.1%). Basic EPS was RMB36.6 cents
(FY2021:RMB36.4 cents). The total dividend for FY2022 is HK20.1 cents (FY2021: HK25.0
cents), equivalent to a dividend payout ratio of 50.0% (FY2021: 60.0%).
During the year, overall gross profit margin decreased by 0.8 percentage points to 40.9%
(FY2021: 41.7%). The decrease in the overall gross profit margin was mainly contributed by
the change in product mix, margin contributions from different brands and products sold.
Selling and distribution expenses amounted to RMB2,690.2 million (FY2021: RMB1,891.5
million), representing 20.8% (FY2021: 18.9%) of the total revenue. The increase mainly from
the increase in advertising and promotional costs and staff costs. Due to increase in
advertising campaigns, the advertising and promotional costs for the year amounted to
RMB1,537.3 million (FY2021: RMB1,019.7 million), representing 11.9% (FY2021: 10.2%) of the
total revenue. Although the operating profit for the year rose moderately by 4.9% to
RMB1,464.3 million (FY2021: RMB1,396.2 million), due to the decrease in operating profit
margin from mass market and athleisure during the year, caused the operating profit margin
decreased by 2.6 percentage points.
As of 31 December 2022, the turnover days for inventories and trade payables increased by
13 days and 1 day to 90 days and 121 days respectively, while the turnover days for trade
receivables decreased by 9 days to 98 days, resulting in an increase in overall working capital
turnover days by 3 days to 67 days