Fujian-based sportswear manufacturer Xtep International Holdings has managed to report better-than-expected earnings for the first half of 2019. The company credits its stellar performance to China's growing sportswear market and the increasing demand for multi-brand sportswear products.
According to a filing with the Hong Kong Stock Exchange on Wednesday, Xtep was able to increase its net profits and revenue by as much as 23 percent for its first six months ending in June. The company's net profits reached $65.5 million on revenues of $470 million.
Xtep has joined its home-grown rivals, which have also reported stellar first-half earnings. Chinese sportswear firms Li Ning, Anta, and 361 all managed to beat analysts' expectations with profit and revenue gains reported across the board.
Xtep is currently China's third-largest domestic sports brand with plans to eventually rise to the top. Since January, the company has been making strategic acquisitions and partnership to achieve that goal. One of its strategies involves the acquisition of popular foreign brands, which it then incorporates into its portfolio.
In March of this year, Xtep announced that it has partnered with Wolverine World Wide to introduce its popular footwear brands to the Chinese market. Wolverine World Wide's more popular offerings include its high-end and rugged Merrell hiking boots and its Saucony athletic shoes.
Just a few months after its partnership with Wolverine World Wide, Xtep made one of its biggest acquisitions yet. In May, Xtep announced that it had acquired E-Land Footwear, the company behind US shoe brand K-Swiss, in a $260 million deal.
According to Xtep's chairman and chief executive, Ding Shiu Po, the first half is only the beginning of the company's rapid expansion plans. The executive explained that 2019 will be a transformative year for the company as it kicks off its multi-brand portfolio, with goals of ultimately becoming a global sportswear player.
With this goal in mind, Xtep has launched huge marketing campaigns to introduce its brand to the rest of the world. Just this month, Xtep managed to sign NBA star Jeremy Lin as its brand ambassador. The signing of the NBA signifies the company's expansion into being more than just a running shoe brand. Xtep plans to release a number of new basketball shoes, including special editions dedicated to the NBA star.
While Chinese players have slowly fought their way into the lucrative industry, international giants Adidas and Nike still dominate the market. The two international brands hold the lion's share of the market, with Anta and Li Ning following close behind.
