Topsports' revenue declined 11% in the first half of fiscal 2027 (ending March), while net profit fell 16% as gross margin contracted 90 basis points to 40.1%. Despite weaker earnings, management declared an interim dividend of CNY 0.11 per share, representing a 103% payout ratio.
Chinese per capita sportswear spend remains far below developed markets, and rising health awareness should continue to lift activewear sales, benefiting Topsports.
Bears
The timing of Nike’s market share recovery in China is uncertain, posing a potential headwind to Topsports’ results.
Topsports is the largest sportswear retailer in China, generating the majority of its revenue from selling products of international sportswear brands. The business operates as an intermediary between brand owners and consumers. The firm operates more than 4,000 stores directly as of the end of fiscal 2026 (ended February), and most of these single-brand stores have been opened under the names of sportswear brands that it partners with, such as Nike and Adidas. Topsports also has partnerships with sportswear brands such as Puma, Li-Ning, Asics, and The North Face. While most of Topsports' sales take place in stores, the firm also operates online shops under the Topsports brand on major e-commerce platforms such as Alibaba and JD.com.