FAST NEWS: 361 Degrees’ Core Brand Records Strong First-Quarter Growth

The latest: Sportswear retailer 361 Degrees International Ltd. (1361.HK) announced that retail sales for its core brand grew by a “high-teens” percentage in this year’s first quarter year-on-year, according to a business update released on Tuesday.

Looking up: The company recorded 20% to 25% growth in retail sales of its kids branded products in the latest quarter, accelerating from the 18.7% growth for all of the previous year, reflecting growing success for the group’s strategy of focusing on the children’s apparel market.

Take Note: The company’s first-quarter e-commerce growth of about 50% represents a slight slowdown from the 55.1% growth for all of last year.

Digging Deeper: As one of the top four sportswear brands in China along with Li Ning (2331.HK), Anta (2020.HK) and Xtep (1368.HK), 361 Degrees focuses on smaller second- and third-tier cities that tend to be less profitable than major urban centers, with the result that its gross margin and market capitalization lag behind its three larger rivals. To keep its revenue growing, the company has invested strongly in children’s apparel and its e-commerce platform in recent years, with strong results. Its e-commerce sales reached 1.23 billion yuan ($193 million) last year, contributing 20.7% of overall sales, while sales of its kids branded products reached 1.11 billion yuan, accounting for about 18.7% of its total just three years after the establishment of its division.

Market Reaction: 361 Degrees’ shares closed flat at HK$4.12 at the midday break on Tuesday. The stock has been on an upward trajectory since March and currently trades in the middle of its 52-week range.

Translation by Jony Ho

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