Topsports reported 1Q24 sales up low 20% YoY this morning. We listened to the earnings call in Mandarin and relay key points: 1) Momentum has slowed with June weaker than May on a YoY basis, and results have yet to inflect vs 2019 levels, 2) 6/18 and Dragon Boat Festival were lackluster 3) adidas performance continues to improve, and 4) management is excited for the HOKA roll out. Momentum started to fade in May and continued through June Topsports reported 1Q24 sales up low 20% YoY (May end). This is line with its prior communication in early June (4Q22 earnings call) that March-April grew 20-30%, indicating May likely weakened. Similarly, Pou Sheng reported May revs up only 7% YoY compare to March/April''s 30%/53% YoY growth (see May Showers?). Topsports mgmt further indicated this morning that June was weaker vs. May on a YoY basis. Monthly YoY momentum has slowed which could be problematic. 6/18 met expectations but the compares were tough due to the timing of 6/18 and the Dragon Boat Festival. The top line was driven by volume while conversion and ticket sizes have remained flat YoY. Footwear continues to outperform apparel. A Covid resurgence in late May caused some disruption. Convergence of the two major brands Nike/adidas represent roughly 90% of Topsports sales per their filings. During Topsports'' FY23 earnings call earlier this month, mgmt. called out that the performance between Nike and adidas was converging. This morning, Topsports further conveyed optimism on adidas given 1) material improvement in inventory positioning, 2) strong sell through of new products, and 3) prudent management on pricing and discounts. Adidas'' improving positioning is a competitive force to be considered especially in Tier 1 and 2 cities. Topsports excited for HOKA roll out In our recent DECK note we flagged that Topsports was partnering with HOKA. See pg 2 for more.