HK Stock Market Move | XTEP INT'L (01368) falls more than 3% in the afternoon, with low single-digit declines in retail sales of the main brand in the first half of the year.

XTEP INT'L (01368) fell by more than 3% in the afternoon, dropping by 3.46% as of the time of publication to HK$3.63, with a turnover of HK$22.07 million. On the news front, XTEP INT'L announced in the afternoon that in the second quarter of this year, the retail sales growth of its main brand XTEP saw a low single-digit year-on-year decline, with retail discounts ranging from 70% to 75%. The retail sales growth of Saucony saw a low single-digit year-on-year increase. In the first half of this year, the retail sales growth of the main brand XTEP saw a low single-digit year-on-year decline, with channel inventory turnover of about four and a half to five months. The retail sales growth of Saucony saw a low double-digit year-on-year increase. A previous report from Daiwa pointed out that the latest channel checks show that the retail sales value (RSV) of the sports goods industry in the second quarter of this year has slowed down by the quarter, with increased fluctuations in RSV compared to the previous quarter, further reducing the short-term predictability of XTEP INT'L. At the same time, the transformation of XTEP's core brand will disrupt wholesale sales operations and require upfront investment, which may dilute XTEP's short-term revenue and profit margins.