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Q2 retail sales are under pressure, but discounts are strictly controlled. The forecast is lowered but the long-term logic remains unchanged (Goldman Sachs)

2026-07-19·ima-daily5min-0719-09-72f270fe38

Street Signal | Q2 retail sales are under pressure, but discounts are strictly controlled. The forecast is lowered but the long-term logic remains unchanged (Goldman Sachs)

A Goldman Sachs report shows that the retail sales of Xtep's core brand in 2Q26 fell by mid-single digits year-on-year, while Saucony's sales increased by low single-digits year-on-year. However, discount control was strict, and the implementation of the brand transformation strategy was slightly slower than expected.

Affected by this, Goldman Sachs lowered its revenue forecast for 2026-2028 by 2-3% and its net profit forecast by 1-3%. However, it believes that short-term performance fluctuations will not change the long-term development logic and the current valuation is attractive.

The market has expected the overall growth rate of the sportswear industry to slow down, but the sales decline of Xtep's core brands may exceed the expectations of some investors, and the negative sentiment has been partially reflected in the stock price.

One-sentence conclusion: Xtep International is facing pressure from the retail side in the short term, but its strict discount control and brand power enhancement strategy have provided a safety cushion for the company's mid- to long-term profit margin improvement and valuation restoration. The current stock price has investment value.

Positive/negative: Short-term negative for Xtep International (1368.HK). Declining retail sales will affect short-term performance. However, the long-term logic has not changed. If the stock price continues to fall, it will be an opportunity for bargain hunting. Catalysts:

1) Retail sales trends in the second half of 2026, especially the performance of key nodes such as Double Eleven;

2) Saucony brand expansion and profit contribution in the Chinese market;

3) Progress and effects of DTC (direct-to-consumer) transformation.

Full text

Q2 retail sales are under pressure, but discounts are strictly controlled. The forecast is lowered but the long-term logic remains unchanged (Goldman Sachs)

A Goldman Sachs report shows that the retail sales of Xtep's core brand in 2Q26 fell by mid-single digits year-on-year, while Saucony's sales increased by low single-digits year-on-year.

A Goldman Sachs report shows that the retail sales of Xtep's core brand in 2Q26 fell by mid-single digits year-on-year, while Saucony's sales increased by low single-digits year-on-year. However, discount control was strict, and the implementation of the brand transformation strategy was slightly slower than expected. Affected by this, Goldman Sachs lowered its revenue forecast for 2026-2028 by 2-3% and its net profit forecast by 1-3%. However, it believes that short-term performance fluctuations will not change the long-term development logic and the current valuation is attractive. The market has expected the overall growth rate of the sportswear industry to slow down, but the sales decline of Xtep's core brands may exceed the expectations of some investors, and the negative sentiment has been partially reflected in the stock price. One-sentence conclusion: Xtep International is facing pressure from the retail side in the short term, but its strict discount control and brand power enhancement strategy have provided a safety cushion for the company's mid- to long-term profit margin improvement and valuation restoration. The current stock price has investment value. Positive/negative: Short-term negative for Xtep International (1368.HK). Declining retail sales will affect short-term performance. However, the long-term logic has not changed. If the stock price continues to fall, it will be an opportunity for bargain hunting. Catalysts: 1) Retail sales trends in the second half of 2026, especially the performance of key nodes such as Double Eleven; 2) Saucony brand expansion and profit contribution in the Chinese market; 3) Progress and effects of DTC (direct-to-consumer) transformation.

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