FAST NEWS: Growth slows for 361 Degrees’ kids products

1361.HK
361 Degrees is one of China’s top four sportswear brands, alongside Li Ning (2331.HK), Anta (2020.HK) and Xtep (1368.HK), and focuses on smaller second- and third-tier cities that tend to be less profitable than major urban centers.

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 Wednesday.

Looking up: The company’s e-commerce business grew by about 20% to 25% during the quarter, mainly due to the launch of e-commerce marketing initiatives aligned with trending topics.

Take Note: Sales for the company’s kids products grew 20% to 25% in the quarter, slowing from the 40% growth in the fourth quarter of 2023.

Digging Deeper: 361 Degrees is one of China’s top four sportswear brands, alongside Li Ning (2331.HK), Anta (2020.HK) and Xtep (1368.HK), and focuses on smaller second- and third-tier cities that tend to be less profitable than major urban centers. It specializes in professional running, a relatively untapped market, but still its sales and gross margins lag its peers. To keep its revenue growing, it has focused on children’s apparel and e-commerce in recent years with strong results. In 2023, its revenue from those two businesses jumped by 35.7% and 38%, respectively, making them an important growth engine.

Market Reaction: Shares of 361 degrees rose on Wednesday, closing up 4.6% at HK$4.75 by the midday break. The stock now trades near the upper end of its 52-week range.

Translation by A. Au

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