FAST NEWS: 361 Degrees’ kids products post strong fourth-quarter gains

The latest: Sportswear retailer 361 Degrees International Ltd. (1361.HK) announced that retail sales for its core brand grew 20% in last year’s fourth quarter, according to a business update released on Tuesday.

Looking up: Retail sales for the company’s kids products grew 40% in the latest quarter, accelerating from the 25% to 30% growth in the third quarter, reflecting growing momentum for the business segment.

Take Note: 361 Degree’s e-commerce sales grew about 30% in the latest quarter, similar to the growth rate in the third quarter.

Digging Deeper: 361 Degrees is one of the top four domestic sportswear brands in China, alongside Li Ning (2331.HK), Anta (2020.HK) and Xtep (1368.HK). It 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 cap trail its three larger rivals. To keep its revenue growing, the company has placed greater focus on its children’s apparel and e-commerce platform in recent years, with strong results. In the first half of last year, its revenue from kids products and its e-commerce platform rose by 33.2% and 38% respectively, becoming important growth engines.

Market Reaction: Shares of 361 degrees initially rose 4.4% on Tuesday, but later gave back all of those gains and closed unchanged at HK$3.62 by the midday break. The stock currently trades near the lower end of its 52-week range.

Translation by A. Au

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