Huaxi Securities: Superstores opening exceeded expectations, with terminal sales remaining robust in Q4 2025

Event Overview
Company announcement on Q4 2025 operational data: 361 Degrees' main brand retail sales increased by approximately 10% year-on-year, 361 Degrees' children’s brand retail sales grew by about 10% year-on-year, and the e-commerce platform's retail sales recorded high double-digit positive growth year-on-year.
　　

Analysis and Judgment:
According to the company announcement, 361 Degrees’ offline growth rate for Q4 2025 remained flat compared to Q3 2025, while online growth slightly slowed quarter-over-quarter. By channel: 1) In Q4 2025, the main brand and children’s offline sales growth rates remained flat compared to Q3 2025 (In Q3 2025, main brand/children’s retail sales increased by approximately 10%/10%). 2) The company's online sales growth slightly slowed quarter-over-quarter (e-commerce sales grew by about 20% in Q3 2025).
In terms of products, 361 Degrees consistently adheres to a brand strategy of 'Technology as the foundation, Brand as the priority,' injecting strong momentum into the high-quality development of the sports goods industry. In running, the all-new racing series Feiran 5 and Feiran 5 FUTURE were launched, the Supai 3rd generation was fully upgraded, and the Supai FLOAT3 introduced new midsole technology to provide better cushioning protection and rebound acceleration; the high-performance dual-density shock-absorbing trail running shoe Lingci 1 made its debut, offering runners excellent grip and foot protection in mountain environments. In basketball, Nikola Jokic's second-generation signature basketball shoes 'JOKER2' debuted in the US, featuring carbon-critical midsole technology and a lightweight bounce tech frame in the forefoot to meet the needs of various types of consumers during gameplay; Aaron Gordon’s sixth-generation signature basketball shoes AG6 were launched, using OARING-AREA jump zones and C-FLOW custom midsoles, bringing stronger starting sensations for basketball enthusiasts. In outdoor gear, new products like the 'Wing Windbreaker,' 'URBAN Assault Jacket,' and 'Sufeng Shoes' were launched. In women's fitness, the Little Egg 1.0 series and New Muscle SE series were refreshed, balancing light warmth with flexible comfort. For children, 361 Degrees launched the Children’s Lightweight Outdoor Shoes Journey 1.0, featuring Rain Screen Technology 4.0 and a zonal traction system, providing assurance for children exploring the outdoors.
In terms of brand building, on December 26th, 361 Degrees officially announced a renewed partnership with the Olympic Council of Asia, marking the start of a new strategic cooperation cycle. It also deepened its strategic collaboration with Kanglun Aerospace and Tianjin University of Sport, integrating aerospace technology and sports research resources to jointly promote the development of competitive sports. During this period, 361 Degrees collaborated with Evonik, a globally renowned specialty chemicals company, at the 8th China International Import Expo, co-hosting a pre-launch event for the global debut of the second-generation MassBalance low-carbon eco-friendly running shoe, 361 Degrees Feiran 5. The professional racing shoe lineup including Feibiao FUTURE2, Lifeng 2, and VENTUS appeared at the 2025 U.S. TRE Summit, showcasing the brand's technological strength. During the 15th National Games, 361 Degrees provided full-event support to the Tianjin and Inner Mongolia delegations, customizing professional athletic gear for athletes to help them perform at their best.
In terms of events, 361 Degrees officially announced its designation as the official supplier for the 2025 WTCC World Tennis Continental Championship, leveraging its extensive experience in major event sponsorships to ensure high-standard execution of this top-tier international tennis competition. For the second consecutive year, 361 Degrees served as the top strategic partner for the Fuzhou Marathon, supporting this event certified by the Chinese Athletics Association A1 and recognized as an elite race by World Athletics. At this event, 361 Degrees brand ambassador Zicheng Li successfully defended his title, winning the men's full marathon championship. As the top partner of the 2025 Tangshan Marathon, 361 Degrees' brand ambassadors Zicheng Li, running endorsers Yuzhou Yao and Dan Feng, and elite runner Yelas Haiylati performed strongly, sweeping the full and half marathon championships and breaking the men’s full marathon record. The final of the 2025 Track 3 10KM Speed Series was further upgraded, continuously increasing the prestige of the event. The Touch & Go finals concluded successfully, gathering grassroots basketball elites from across the nation in Foshan, boosting the upward momentum of Chinese basketball. The 'One Shot' badminton city tournaments took place in Nanjing and Wenzhou, with world artistic swimming champions and World Junior Championship winners specially invited to ignite city-wide enthusiasm for sports.
In terms of channel development, 361 Degrees accelerates its e-commerce expansion with a thousand stores joining Taobao Flash Purchase, launching a new instant retail strategy. By December 31, 2025, the cumulative number of 361 Degrees Super Stores in mainland China will reach 126, and the number of ONEWAY stores will be six. The first overseas Super Store grandly opened in Cambodia, marking a new step in the brand’s overseas market layout, with continuous enhancement of internationalization and localization capabilities in the retail network.

Investment Advice
We analyze that: (1) In the short term, 361 Degrees benefits from the trend of consumption downgrading. In running shoes, models like Feiyan and Feibiao have shown strong sales performance. Professional marathon racing shoes, Feiyan 5 and Feiyan 5 FUTURE, were launched, and the Supai family's third generation received a comprehensive upgrade. The Supai FLOAT3 uses new midsole technology to achieve better cushioning protection and rebound acceleration; the high-performance dual-density cushioning trail running shoe, Lingci 1, made its debut, offering runners excellent grip and foot protection in mountain environments, providing an upgraded experience for running enthusiasts. In basketball shoes, Nikola Jokic’s second-generation signature basketball shoe, 'JOKER2,' was first released in the U.S., equipped with carbon-critical midsole technology and a lightweight front sole frame to meet various consumer demands in real-game situations. Aaron Gordon's sixth-generation signature basketball shoe, AG6, has been launched, using OARING-AREA jump zones and C-FLOW custom midsoles, delivering stronger starting sensations for basketball fans. (2) Super Stores exceeded expectations in store openings in 2025, showing impressive rates of customer acquisition and repeat purchases; in 2026, Super Stores are expected to continue expanding and contribute to further growth in store efficiency. (3) Outlets and instant retail (in collaboration with Meituan Flash Purchase and Meituan Group Buying) are expected to provide new drivers for company revenue growth. (4) With six ONEWAY stores currently, future expansion is anticipated to offer new momentum for revenue growth. We maintain our profit forecast and keep the revenue forecasts for 2025/2026/2027 at RMB 11.616 billion/13.353 billion/15.317 billion; net profits attributable to shareholders for 2025/2026/2027 are maintained at RMB 1.395 billion/1.630 billion/1.873 billion; corresponding EPS for 2025-2027 is RMB 0.67/0.79/0.91. The closing price on January 12, 2026, of HKD 5.79 corresponds to PE ratios for 2025-2027 of 7.7x/6.6x/5.7x (assuming 1 HKD = 0.90 RMB), and we reiterate a 'Buy' rating.
Risk Warning: Intensified competition in the sports market; risk of not achieving expected store efficiency improvements; inventory risks; systemic risks.