Shanxi Securities: Retail sales maintain healthy growth, number of premium stores to reach 126 by the end of 2025

Event Description
On January 12, the company released its Q4 2025 operating data. In Q4 2025, offline retail sales of the 361 Degrees main brand increased by 10% year-on-year, offline retail sales of the 361 Degrees children's brand grew by 10% year-on-year, and e-commerce platform retail sales for 361 Degrees achieved high double-digit year-on-year growth.

Event Commentary
In Q4 2025, offline revenue maintained double-digit growth, with e-commerce channel growth outpacing offline.In Q4 2025, the retail sales of 361 Degrees' main brand in offline channels increased by 10% year-over-year, and the retail sales of 361 Degrees' children's brand in offline channels also grew by 10%. The retail sales on 361 Degrees' e-commerce platform saw a high double-digit growth. By category, this quarter witnessed a flurry of new product launches. In the running segment, the all-new racing series 'Fei Ran 5' and 'Fei Ran 5 FUTURE' were launched; the Su Pai Family 3 underwent a comprehensive upgrade. In the basketball segment, Nikola Jokic’s second-generation signature basketball shoes 'JOKER 2' debuted in the US, while Aaron Gordon's sixth-generation signature basketball shoes 'AG6' hit the market.
Operational metrics remained stable in Q4 2025, and the expansion pace of super stores exceeded expectations in 2025.In Q4 2025, the average retail discount for new seasonal products was approximately 70-71%, while the inventory-to-sales ratio remained within the range of 4.5 to 5 months, indicating stable operations. For online channels, the e-commerce layout accelerated further as 1,000 stores joined Taobao Flash Purchase, marking the start of an instant retail strategy. In terms of offline channels, by December 31, 2025, the company had expanded its network to 126 super stores nationwide, including the grand opening of its first overseas super store in Cambodia, which represented a significant step forward in the brand's international market expansion. The company's Finnish outdoor sports brand ONEWAY has six stores, mainly located in regions with strong outdoor demand such as Northeast and North China.

Investment Advice
We maintain our earnings forecast, expecting the company's EPS for 2025-2027 to be RMB 0.62, 0.69, and 0.76 respectively. Based on the closing price on January 12, the company's PE ratios for 2025-2027 are estimated at around 8.4, 7.5, and 6.9 times. We expect that with its high-quality yet cost-effective products and the rollout of super stores, retail sales will likely continue to grow steadily. We reaffirm our 'Buy-B' rating.

Risk Warning
Intensified competition in the mass sports market; e-commerce channel growth lower than expected; sharp fluctuations in raw material prices.