Li Ning Company, Ltd. reported net income grew 11.6 percent in the half ended June 30 on a 21.7 percent revenue gain. The improvement came despite the “impact of repeated outbreaks of the COVID-19 pandemic and significant increase in raw material prices that led to certain challenges to the operating environment.”

Sales reached RMB12,409 million ($1.8 bn) against RMB10,197 million a year ago.

By Product Category:

  • Footwear sales climbed 47.1 percent to RMB6,759 million against RMB4,594 million;
  • Apparel sales declined 3.1 percent to RMB4,907 million from RMB5,061 million; and
  • Equipment sales improved 37.4 percent to RMB743 million from RMB541 million.

Net profit came to RMB2,189 million versus RMB1,962 million a year ago, and the net profit margin decreased from 19.2 percent to 17.6 percent. Gross profit margin was lowered by 5.9 percentage points to 50.0 percent

Operational Highlights

  • Operation improvement mitigated a certain extent of the negative impact of COVID-19.
  • The retail sell-through for the overall platform increased by high-single-digits, including online and offline channels.
  • Channel inventory increased by the mid-forties, mainly due to business expansion and the early layout planning made by the company to seize opportunities for growth. The inventory turnover remained at a healthy level with continuous improvement in the aging structure.
  • Offline channel new product sell-through increased by mid-teens.
    • sell-through mix of new products increased by 6 percentage points;
    • sell-out rate for 6 months declined by approximately 7 percentage points; and
    • sell-out rate for 3 months declined by approximately 9 percentage points.

Photo courtesy Li-Ning