Northeast Securities: Strong Growth Resilience at the Terminal, Rapid Expansion of Premium Stores

The company released its 2025 Q4 operating situation. The offline retail sales of the 361 Degrees main brand grew by approximately 10% year-over-year, while the offline retail sales of the children’s brand also increased by about 10%. The overall transaction volume of products on 361 Degrees’ e-commerce platform registered a high double-digit year-over-year growth.

Terminals demonstrated strong growth resilience.361 Degrees' main brand and children's brand Q4 offline retail sales increased approximately 10% year-on-year, with the growth rate remaining flat compared to Q3 (25Q3 main brand/children's brand offline retail sales both increased by 10% year-on-year). The e-commerce channel continued to outperform offline growth, with Q4 sales growing by a high double-digit percentage year-on-year, maintaining a leading growth rate in a volatile consumer environment.

Continuous technological empowerment is driving product innovation and upgrades.During the reporting period, the racing product line 'Fei Ran 5' and 'Fei Ran 5 FUTURE' were launched in the running shoe sector. New jogging training shoes 'Su Pai FLOAT3' and 'Su Pai CQT3' were introduced, alongside the launch of cushioned trail running shoes 'Ling Ci 1st Generation'. In the basketball shoe category, 'Jokic 2nd Generation' debuted in the US, along with Aaron Gordon’s 'AG6'. New products were also rolled out in outdoor, women’s fitness, comprehensive training, and children’s sectors.

Continuous investment in brand building.On December 26, 2025, the company officially announced a new strategic cooperation cycle with the Olympic Council of Asia. At the 8th China International Import Expo, the company, in collaboration with Evonik, hosted the 'Global Launch Preheating Ceremony for the Second-Generation Mass Balance Low-Carbon Environmental Running Shoe: 361 Degrees Fei Ran 5'. Additionally, professional racing shoes like 'Fei Biao FUTURE2' and 'Li Feng 2' made an appearance at the US TRE Summit, showcasing the brand's technology on an international scale. In terms of event sponsorship, the company continues as a domestic marathon partner and promotes its own events.

Accelerated expansion into instant retail.The company has facilitated over a thousand stores to join Taobao Flash Purchase, empowering offline stores. Regarding offline stores, by December 31, 2025, there are 126 premium stores and six ONEWAY stores. Meanwhile, the first overseas premium store opened in Cambodia, accelerating the overseas market strategy.

Investment advice: As a leading domestic sports brand, 361 Degrees focuses on positioning itself in the mass market to enhance product quality-to-price ratio, continuously improving brand influence. It is forecasted that the company will achieve year-on-year revenue growth of 13.8%/11.1%/10.1%, reaching 11.47/12.74/14.03 billion yuan from 2025 to 2027; net profit attributable to shareholders will increase by 11.6%/15%/10.3% year-on-year to 1.28/1.47/1.62 billion yuan, corresponding to valuations of 8/7/7 times, maintaining a 'Buy' rating.

Risk warning: Risks include slower-than-expected development of new products, slower-than-expected store expansion, intensified market competition, and lower-than-expected earnings forecasts and valuations.