Guosen: Maintains "Outperform" rating on 361 DEGREES (01361), third-quarter sales growth in the mid-single digits.

Guosen released a research report stating that 361 DEGREES (01361)'s retail performance in the third quarter of 2026 was generally solid. The offline retail sales of the main brand increased by a mid-single-digit percentage year-on-year, and the offline retail sales of the children's wear brand also increased by a mid-single-digit percentage year-on-year. Both the core brand and the children's business continued their good growth momentum; the overall gross merchandise value of the e-commerce platform recorded a mid-to-high single-digit positive growth year-on-year, and the online channel continued its relatively rapid expansion; the discount rate slightly narrowed to 70% off, and inventory remained stable. The bank maintained its earnings forecasts, expecting the company's net profit attributable to shareholders for 2026-2028 to be RMB 1.48 billion / 1.62 billion / 1.74 billion, respectively, with year-on-year growth of 12.9% / 9.8% / 7.3%, and maintained its "Outperform" rating. Guosen's main points are as follows: Third-quarter retail performance On October 14, the company announced its retail performance for the third quarter of 2026. The offline retail sales of the 361 DEGREES main brand recorded a mid-single-digit positive growth, the offline retail sales of the children's wear brand recorded a mid-single-digit positive growth, and the e-commerce platform recorded a mid-to-high single-digit positive growth. Third-quarter retail performance was generally solid In the third quarter of 2026, the company's retail performance was generally solid. The offline retail sales of the main brand increased by a mid-single-digit percentage year-on-year, and the offline retail sales of the children's wear brand increased by a mid-single-digit percentage year-on-year. Both the core brand and the children's business continued their good growth momentum; at the same time, the overall gross merchandise value of the e-commerce platform recorded a mid-to-high single-digit positive growth year-on-year, and the online channel continued its relatively rapid expansion, continuing to play the role of a growth engine; the discount rate slightly narrowed to 70% off, and inventory remained stable. Third-quarter gross merchandise value grew by a mid-single-digit percentage, and super stores completed the full-year store opening guidance ahead of schedule In the third quarter, under the adverse impact of fluctuations in weather and the industry consumption environment, the company's gross merchandise value grew by a mid-single-digit percentage, maintaining relatively good operational resilience, with the inventory-to-sales ratio remaining stable, and discounts slightly narrowing quarter-on-quarter amid fierce industry price competition; new store formats continued to expand, with the number of domestic super stores further expanding to 208, completing the full-year store opening guidance ahead of schedule. The bank is optimistic about the company's growth resilience and maintains its earnings forecasts. Risk warnings Consumer demand recovery falling short of expectations; channel expansion falling short of expectations; damage to brand image; systemic market risks.