Xtep International posted almost no revenue growth in the first half of 2026, but that flat number hides a real split in the business. Total revenue came in at RMB 6.8 billion (€873m), down just 0.6 percent. Look closer, though, and the two brands behind that number moved in opposite directions.
Saucony and Merrell, the group’s licensed running and outdoor brands, grew revenue 11.4 percent to RMB 875 million (€112m). The core Xtep brand, still the group’s biggest business by far, slipped 2.2 percent to RMB 5.9 billion (€761m).
| Xtep International Holdings: Income statement and dividend | |||
| H1, ended June 30 | |||
| H1 2026 | H1 2025 | Change | |
| Revenue (€m) | 873 | 879 | -0.6% |
| Gross profit (€m) | 406 | 395 | 2.6% |
| Selling, distribution and admin expenses (€m) | -299 | -273 | 9.5% |
| Adjusted operating profit (€m)* | 155 | 165 | -6.2% |
| Operating profit (€m) | 149 | 168 | -11.0% |
| Net profit, attributable to shareholders (€m) | 105 | 117 | -10.5% |
| Gross margin | 46.4% | 45.0% | +1.4pts |
| Net margin | 12.0% | 13.4% | -1.4pts |
| Basic earnings per share (RMB cents) | 30.0 | 34.6 | -13.1% |
| Interim dividend per share (HK cents) | 18.0 | n/a | n/a |
| Dividend payout ratio | 53.8% | 50.0% | +3.8pts |
*Excludes RMB43 million of share award expenses in H1 2026 and the reversal of RMB21 million of share award expenses in H1 2025. Euro figures converted from RMB at 1 EUR = 7.78 CNY, the approximate mid-market rate on Aug. 25, 2026, applied uniformly to both periods for comparability. Change column reflects original RMB figures; percentages and margins are unaffected by conversion. Basic earnings per share is reported in RMB and interim dividend per share in HK dollars, matching Xtep’s own disclosure; neither is converted to euros here. H1 2025 dividend per share in HK dollars was not disclosed in this presentation.
Source: Xtep International Holdings, 2026 Interim Results Presentation, Aug. 25, 2026.
Saucony grows while the core Xtep brand cools
Xtep is now running two different plays at once: cheaper shoes at scale under its own name, and pricier gear under Saucony aimed at serious runners. The Saucony and Merrell business made a gross margin of 55.5 percent, more than 10 percentage points above the 45.1 percent the main Xtep brand earned, even after Xtep held the line on discounting Saucony’s flagship styles.
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Xtep doesn’t break out Saucony’s numbers from Merrell’s, but the detail in the release points mostly to Saucony, the century-old US running brand whose Greater China business Xtep has run since buying out Wolverine Worldwide’s stake in the local joint venture in January 2024. Saucony opened its first standalone “image” store in Hong Kong in June, at K11 Art Mall, and ended the half with 180 stores in China. Merrell, the group’s hiking and outdoor label, added new trail-running and hiking shoes, including a third collaboration with Snow Peak.
Marathon wins came with a bigger bill
Xtep and Saucony together led the wear-rate rankings at five of China’s biggest marathons this year:
- Xiamen: 54 percent
- Chongqing: 51 percent
- Renshou: 49 percent
- Wuhan: 46 percent
- Wuxi: 39 percent
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Xtep athlete Feng Peiyou broke the Chinese national marathon record at the Tokyo Marathon, finishing in 2:05:58 and running faster than any other Asian competitor in the race. Xtep timed its 160X 8.0 shoe line and a cheaper Qing Yun collection to ride that moment, hoping to pull marathon-curious shoppers up into pricier gear.
Winning on the course costs money off it.
Marketing, store and administrative costs rose 9.5 percent and now eat up 34.2 percent of revenue, up from 31.0 percent a year earlier, as Xtep spent more on shipping, online platform fees and buying back stores from local distributors. Operating profit fell 11.0 percent to RMB 1.16 billion (€149m), and the adjusted operating margin dropped to 17.7 percent from 18.8 percent.
Xtep closed the half with 6,308 adult stores, down from 6,357 at the end of 2025, choosing fewer stores it doesn’t control over more stores that don’t feed it sales data.
The effort paid (partially) off in capital markets.
Shares in Xtep (SEHK: 1368) rose 6.16 percent to HK$3.79 (€0.41) on the day of the release. The stock is still well below its 52-week high near HK$6.78 (€0.74), a sign investors remain cautious about the slowdown in Xtep’s main business, even though they liked what they saw in the margins.
Running remains the growth engine
Management calls its strategy “professional-to-mass influence”: using marathon-grade technology from the 160X and Saucony Endorphin lines to justify higher prices further down the range, while converting more distributor-run stores into ones Xtep operates directly. Company leaders pointed to Beijing’s target of growing China’s sports industry past RMB 7 trillion (about €900bn) by 2030, plus record marathon sign-ups nationwide, as reasons to keep the focus on running.
Xtep gave no specific revenue or margin guidance for the second half.
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