Li Ning profit up by 196 per cent as restructure pays off
Chinese sportswear retailer Li Ning reaped the benefits of a restructure in the first half of this year, with net profit attributable to shareholders by 196 per cent to RMB795 million (US$113 million).
For the last two years, Li Ning has been investing in its retail business, upgrading stores, refining its product offer and reorganising its supply chain and other back-of-house operations.
More recently it has launched a new retail brand Li Ning Young, which has added 79 more stores so far this year, taking the network to 872.
The company said its margin has increased from 5.7 per cent during the first half of last year to 12.7 per cent in the same period this year.
While the huge profit boost was partly due to non-operational factors, the regular business still posted a surplus up 109 per cent to RMB561 million, and net profit margin was 9 per cent.
Group sales revenue rose 33 per cent to RMB6.255 billion ($889.5 million), with same-store sales growing by the mid-teens.
The company said it was focused on strengthening its brand and product competitiveness during the first half, especially its five core categories: basketball, running, training, badminton and sports casual.
“We set professionalism and functionalism as the foundation, and consolidated the brand’s DNA of professional sports,” the company said in an earnings statement.
As at June 30, Li Ning had 6422 points of sale, a net increase of 112 over three months.
The network of conventional stores, flagship stores, China Li-Ning stores, factory outlets and multi-brand stores under its brands amounted to 7294 as of June 30, representing a net increase of 157 since December 31.