Investors and media friends, good afternoon. Welcome to Xtep's 2024 Interim R esults Presentation webcast and conference call. I am Sophia, Director of IR Department. Online, we have our management, including Chairman and CEO, Mr. Ding Shui Po ; President, Mr. Tian Zhong; CFO, Mr. Yang Lubin. In today's webcast and conference call, it will be conducted in Mandarin with English simultaneous interpretation. The management will first present our 2024 interim results, followed by a Q&A session. I will give you the procedures for Q&A later. I will now pass the floor to Mr. Ding Shui Po , our Chairman and CEO. Mr. Ding, please. Investors, media friends, good afternoon. Thank you for attending our 2024 I nterim Results P resentation. My name is Ding Shui Po. In the first half of 2024, the macro economy continued to be challenging. Consumer confidence was not enough, adding pressure to the retail environment.
However, the popularity of national fitness in China continues to increase, driving sports products industry to perform better than the overall retail industry. In China, among sports that people often participate in, running ranks among the top, and marathon events are also experiencing strong recovery. Consumer demand for sports products has increased. Xtep core brand business performed steadily, and Saucony has continued a strong growth. Our group strategy: In May this year, our group announced the strategic disposal of K-Swiss and Palladium, and concentrated resources on the development of high-profit brands, including Xtep core brand and Saucony and Merrell. First of all, we continue to focus on running as the general direction of our group strategy. The three brands in the running vertical form a complementary layout for the mass market and high-end markets, consolidating our group's position as China's number one running brand.
For Xtep core brand, we are oriented towards the mass market and influence the public with its professional potential. Saucony and Merrell focus on the high-end market and provide more choices for consumers who like other niche sport categories. Our multi-brand strategy can meet the needs of multiple customer groups in different sport scenarios and generate strong synergy. In addition, our ESG governance has achieved a historical breakthrough. In the latest Morgan Stanley ESG rating, we're upgraded to A level, becoming the first A-grade company in China's sports goods industry, achieving three consecutive upgrades in three years. To summarize, although the economy in the second half of the year is still full of uncertainty, our leading position in the running market brings a unique competitive advantage to our group. China's sports industry continues to expand, and the number of runners is also increasing.
We're on a very good track, and we are confident in the long-term development of the group. In the future, we will continue to maximize shareholder value and create good returns for investors. Thank you. Now, I will pass the floor to Mr. Yang and Mr. Tian to give you an analysis on our financials and business. Thank you. Thank you, Mr. Ding. Welcome, everyone, to Xtep's 2024 Interim Results Presentation. Looking back on the first half of 2024, China's economy continues to face uncertain development. Consumer sentiment has been weak, which has affected the development of our company's brands to a certain extent.
Thanks to the effort of all colleagues in our group, our brands are still able to achieve a certain level of growth, and the professional sports division of Saucony and Merrell have exceeded the targets set for the first half of the year, with sales growth exceeding 72%. Please turn to page two of the PPT. Our group's total sales increased by 10.4% to RMB 7.203 billion, of which Xtep's core brand product sales increased by 6.6% to RMB 5.789 billion. In terms of new brands, sales of Saucony and Merrell, that is the professional sports segment, increased by more than 72% to RMB 593 million. Sales of Athleisure segment increased by 9.7%.
Our gross profit margin increased by 3.1 percentage points to 46%, mainly due to the improvement in gross profit of each brand. Our profit was RMB 752 million, up 13% year- on- year. Operating cash inflow, RMB 826 million, higher than our net profit of RMB 752 million. Based on healthy cash flow, the board of directors recommended an interim dividend of HKD 0.156 per share. Dividend payout ratio, 50%. This Friday, we will convene a special or an EGM on the 23rd. If the agenda is approved by shareholders, there will be an additional special dividend of HKD 0.447 per share. Together with the interim dividend of HKD 0.156, the total dividend will be HKD 0.603.
The interest or the dividend timetable is expected to be at the end of October or early November. Just now, as Mr. Ding said, our ESG has been well-recognized by the market. Our rating has just been upgraded from BBB to A by MSCI. We're one of the few companies with the highest rating in China's footwear and apparel industry. Next, let's turn to page four, our profit and loss statement. Sales revenue increased by 10.4% to RMB 7.203 billion. Gross profit was up 18.5% to RMB 3.314 billion, faster than growth of sales revenue, because gross margin increased 3.1 percentage points year-on-year to 46%. SG&A up 16.2% to RMB 2.495 billion. The reason for the increase will be explained in detail later.
Operating profit up 10.9% to RMB 1.094 billion. Net profit up 13% to RMB 752 million. Net profit margin slightly increased by 0.2 percentage points year-on-year to 10.4%. Page five, consolidated balance sheet. The balance sheet is in a very healthy position. Our group is still in a net cash position. Net cash increased by RMB 482 million or 51.7% to RMB 1.414 billion. Current ratio improved to 2 times from 1.9 times last year. Bank borrowings decreased by about a few hundred million to RMB 2.047 billion. In the past, bank borrowings were mainly used for dividend payment in Hong Kong.
Since more than 90% of our group business is in mainland China, there are certain foreign exchange controls when remitting money to Hong Kong, and if dividends are paid, then we need to pay 5% dividend tax. However, due to decline in mainland interest rates and the rise in Hong Kong interest rate, we started to apply to remit money to Hong Kong since last year to repay Hong Kong borrowings. In the first half this year, we already repaid more than HKD 1 billion loans, and it is expected that all Hong Kong loans will be repaid within this year to reduce interest expenses. Now, let's turn to page six, our group's working capital analysis.
Total working capital days are seven days more than the end of last year, mainly because inventory turnover days increased from 90 days at the end of last year to 100 days at the end of June this year, but it is seven days more than the same period last year. Inventory turnover days increased compared with the end of last year, mainly for the following two reasons: One, we acquired the U.S. subsidiaries of Saucony and Merrell in China on 1st January this year, adding about RMB 200 million in inventory. Number two, new brands opened or adopted DTC model in operation, so inventory has also increased for this reason. For core brand, inventory is still at a healthy level. Inventory at the retail end is also healthy, around four months.
Then for turnover days of accounts receivable, it decreased by six days to 100 days compared with the end of last year. Accounts payable days also decreased from 113 days at the end of last year to 110 days, so it's it was reduced by three days. Overall speaking, all these indicators are at healthy level. Page seven. We will analyze the three divisions or segments separately. First, Xtep core brand. Sales revenue up 6.6% to RMB 5.789 billion, of which kids increased about 18%. Due to an increase in gross profit margin by 0.8 percentage points, gross profit increased by 8.6% to RMB 2.539 billion. Operating profit margin increased by 0.2 percentage point year-on-year to 20.6%.
Net profit up 7.3%. Net profit margin was 16.1%, slightly higher than last year's 16%. Looking into the second half of 2024, in face of this sluggish consumption, the core brand's lifestyle products, especially, clothing or apparel products, will be under certain pressure. However, driven by growth of running products and kids, it is expected that there will be some growth. But our tentative target will be more conservative in order to avoid excessive inventory. Next, professional sports segment. Saucony and Merrell sales increased more than 72% to RMB 593 million. Gross profit margin dropped slightly by 0.4 percentage point. The main reason is that the franchise model was launched last year. Gross profit margin of wholesale revenue will be lower than direct sales.
Wholesale revenue accounts for about 14.2% of total revenue, comparing with 10.4% in the same period last year. Operating profit, RMB 32 million. Merrell and Saucony both achieved profitability. Looking forward into the second half of 2024, Saucony and Merrell will still enjoy good growth. That's why we have adjusted our whole year growth target from 3% to 4% growth to 50% growth for the full year. Next, K-Swiss and Palladium Athleisure segment. Sales increased by 9.7%. The growth mainly came from China. Overseas business sales continued to decline by double digits. The overall growth was also lower than the target of 20% plus at the beginning of the year.
Gross profit margin improved from 42% in the same period last year to 53.4%, mainly because DTC was the main model for mainland business, and gross profit margin of DTC is higher than GP margin of overseas wholesale. Operating loss, RMB 104 million, an increase of RMB 31 million from the loss of RMB 73 million in the same period last year. Forecast of a full year loss will be about RMB 200 million. That remains unchanged. On the 23rd, during the EGM, if we are allowed to sell K-Swiss and Palladium, then the whole year loss will be reduced. It will be around $9 million loss, which was the level forecast at the end of March. Next page, SG&A.
SG&A was up RMB 1.62 billion to RMB 2.59495 billion, accounting for 34.6% of sales, up 1.7 percentage points year-on-year. The increase was mainly because of advertising and promotion expenses. It was up 11.8% or RMB 101 million year-on-year, accounting for 13.3% of sales. The main increase was because, number one, new marketing activities of new brands have increased. If we only consider the core brand, the marketing expenses have actually dropped by RMB 30 million, from RMB 742 million last year to RMB 720 million this year. Some Olympic-related expenses were incurred in the first half this year in advance, and expenses are expected to decrease in the second half. It is expected that A&P expense ratio will drop below 13% in 2024.
R&D expenses slightly decreased by RMB 17 million. Staff costs increased by about RMB 100 million, mainly because most new brands are DTC, and cost of store employees has also increased with the increase in number of stores. Other expenses increased RMB 163 million. There are two main reasons for the increase: one, increase in e-commerce, logistics, and warehousing costs. Number two, increase in DTC store rent. Finally, in the face of the downturn in 2024, we will pay more attention to controlling expenses in the second half of the year, and also inventory management. Overall sales in 2024 may not reach targets set at the beginning of the year, but we believe that we are able to achieve healthy level.
For 2024 sales, even though it may not reach the target set at the beginning of the year, but there should still be some growth, and in the second half of the year, we'll control expenses very strictly. Profit target for the whole year, this year, is expected to reach 20-plus% growth, as set at the beginning of the year. The above is my financial presentation. Now I will pass the floor to Mr. Tian. Thank you. Thank you, Ricky. Investors and media friends, good afternoon. I will now introduce to you our operations in the first half of the year. Now, let's take a look at the trends of China's sports industry. At present, the macroeconomy is full of challenges. Chinese consumer confidence still needs to recover. Starting June this year, the retail environment had been under pressure.
Besides, according to National Bureau of Statistics data, people's demand for sports goods has remained stable, and it's better than the overall consumer industry last year. So we have full confidence in the future of China's sports industry. Besides, Chinese consumer spending trends are changing. So, there in different tiers of cities for different age groups, there are diversions in their consumption. There are two main trends that are very clear. First, some consumers attach more value to value for money. They go for rational consumption. Another group of consumers attach importance to cost effectiveness. For those who value value for money, they are willing to pay high premium for brands in subdivided categories. And then our multi-brand strategy and complementary layout of mass market and high-end market just cater to the current changes in consumer trends.
Now, let's take a look at trends about marathon. According to data from Chinese Athletics Association, since last year, in terms of number of participants and the number of events, well, these have resumed to close to 85% of the pre-pandemic level. In 2024, for marathoners and also sub-three-hour runners, there are 3,400 such runners. And among global marathon events, I think we will be in the top five, so that means that Chinese runners are getting more professional. For marathon, professional gear demand, there will be bigger demand as a result. According to 2023, CCTV Finance China Better Life Survey, more than 50% of the respondents chose running as their most favorite sport. For running and also our confidence in this particular category, well, it has not changed.
Now let's take a look at our strategic core. We will continue to focus on running. When we announced our strategic disposal of K-Swiss and Palladium, it is even clearer that we are focusing on running. Our core brand affects the mass market. We are offering good value for money running products for the market. Saucony will continue to focus on professional runners, and Merrell will focus on outdoor needs. So in this way, we can consolidate our status as China's number one running brand. For Xtep core brand will continue to focus on running, and we continue to make use of our professional potential of 160 X series. This year, we create a championship running shoes to offer even higher value for money running shoes to increase market share.
At the beginning of this year, we introduced 260X and 360X at RMB 799. It is a very good value for money. Since launch, we have got very positive market feedback. In China, Xtep has the largest running ecosystem, and we have formed a unique mode. In China, we have 67 running clubs, 2.1 million and above members in our running club, and there are more than 5,700 running groups. For each running group every week, offline, they organize three to five events. We sponsor 56 top domestic and overseas marathon athletes. So we continue to offer better products and services to all runners. In terms of channels, we continue to open large stores and close small stores, and we upgrade our store image.
As of June 30th, 2024 , number of Xtep adult stores total 6,578 , of which 75% are ninth generation stores. For kids business, in first half 2024 , we maintained rapid growth momentum. We continued to improve running shoe technology. We hope to help healthy growth of kids. In March this year, we launched the A+ Healthy Growth Series, so for Chinese children and youths, we offer a better protection for their healthy foot development. In May, we reached a strategic cooperation with Sports and Health Science Research Center of Tsinghua University to jointly establish a growth database of Chinese children and gain better understanding of sports growth. As of June 30th, 2024 , number of Xtep kids stores was 1,706 . E-commerce business. It is an important sales channel for the group.
In the first half of the year, revenue was up 20% year-on-year, accounting for more than 30% of Xtep's core brand revenue. For emerging e-commerce channels like Douyin, Shipinhao, and Dewu, rapid growth exceeded 80%. On 618, online GMV increased by more than 40%. Professional sports, Saucony and Merrell's business scale has rapidly expanded in China. In first half 2024, revenue increased by 72% year-on-year. Since 2019, Saucony's revenue doubled every year, becoming the group's first profitable new brand. As of June 30th, 2024, Saucony has 128 stores in China. Saucony continues to focus on Double Elite positioning, so running elite and social elite.
In China and also international marathons, the wear rate of the brand became within top three, gradually occupying mind share of professional running. Starting this year, Saucony returned to brand strategy. We focus on four major areas of spokespersons, products, marketing, and channels. To start the first year of brand upgrade for Saucony in July, we officially announced that the internationally renowned Peng Yuyan would be our brand spokesperson, interpreting the Double Elite positioning strategy with professional image. For marketing, we sponsor large-scale running events to increase market exposure. The brand has sponsored China's Cross Mountain to Sea Relay for four consecutive years, helping more than 25,000 elite runners challenge themselves. For products, we continue to launch products suitable for Double Elite crowds and create popular products such as Victory 22, Shengli 22.
For channels, we launched new image, new store image. The first new image store will be opened in Shenzhen in September. We'll continue to open stores in core business districts of high-tier cities, and we'll focus on improving store efficiency and store productivity. For Merrell, in the first half of the year, we had more than 85% revenue growth. For products, we will focus on outdoor products. We'll expand the product line and strengthen attributes of trail running and outdoor products. And for supply chain will be sales-led and enhanced flexible supply chain and improve rapid response capabilities. Regarding channels, we're focused on online channels. And then for Athleisure, K-Swiss and Palladium, revenue grew 9.7%, mainly driven by rapid expansion of China business. Revenue growth in China exceeded 85%.
As of 30 June 2024 for K-Swiss and Palladium in Asia Pacific, number of stores was 105 and 114 respectively. For sustainability, this year we made good achievements. In terms of sustainability rating, our group has repeatedly been recognized by international authorities. In July this year, the MSCI ESG rating was raised to A level, making us an industry leader. We joined the United Nations Global Compact, and we'll make greater contributions to promoting global sustainable development. We continue to launch environment-friendly products, including bio-based materials made running shoes. This year, there will be more than 30,000 Xiamen Marathon runners, to whom we will offer recycled fiber technology creating a marathon eco-marathon benchmark. Now, let me summarize our group's strategy and outlook.
Our group will continue to focus on running and adhere to the development direction of China's number one running brand. In May this year, we strategically announced the strategic disposal of K-Swiss and Palladium. After that, our group's resources and business strategy will be more focused. For profit and cash flow, they will significantly improve, which will help further develop Xtep core brand, Saucony and Merrell. And then it will release greater synergy and growth potential for the future. For Xtep core brand, we'll continue to focus on running and influence mass runners with professional potential. We'll expand product matrix and provide cost-effective products for mass runners. For Saucony, we will focus on Double Elite crowds and return to branding. We'll maintain rapid growth and drive our group's second growth curve.
Despite the uncertainties in the macro environment, we remain confident in the group's long-term development. Thank you very much.