Xtep International is guiding for an increase of at least 65 percent in net income for the first half of 2021, thanks to better-than-expected revenues and higher gross margins. The company, which has also a joint venture with Wolverine Worldwide for China, had reported a profit of 247.9 million yuan renmimbi ($35m) for the first half of 2020, down from RMB 463.0 million in the same period a year earlier.
The core Xtep brand enjoyed a sales increase of between 40 and 45 percent in the first half, although the growth decelerated to 30-35 percent in the second quarter from the first quarter. Xtep Kids rebounded, following a comprehensive restructuring program.
The company highlighted a surge in e-commerce, boosted by ramped-up promotional efforts on online platforms, social media and live streaming channels. It described the rise in replenishment orders from distributors as “remarkable.”
In a similar update, 361 Degrees reported growth of between 15 and 20 percent for its core brand in the second quarter as compared to the year-ago period, substantially in line with the pace achieved in the first quarter. The 361° Kids line recorded a higher growth rate of 30 to 35 percent.
For its own first quarter, which ended June 30, China Dongxiang reported growth in the low- to mid-teens at its retail stores for the Kappa brand, for which it owns the rights for China, as well as for the Kappa Kids retail business. Same-store sales went up by mid-to-high single-digit rate, but the number of stores increased by 34 to 1,386 year-on-year.