Li Ning profit boosts almost double
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Chinese sportswear giant Li-Ning reported a massive 110-per-cent boost in profit for last year on sales up 32 percent.
Total revenues reached ¥13.87 billion (US$127.9 million) compared with ¥10.51 billion ($96.95 million) in 2018. Net profit attributable to shareholders increased from ¥715.3 million ($6.6 million) to ¥1.5 billion ($13.8 million).
CEO and executive chairman Li Ning, said the result reflected the company’s strategy of creating and enhancing the brand’s “experience value”.
“We have adopted diversified strategies and approaches to consolidate the advantages of online and offline and also made use of digital marketing to further promote our engagement with different consumer groups and hence enhance the image and value of the Li-Ning brand.”
The former Olympian said throughout last year the company steadily improved profitability and operational efficiency.
The group improved its gross profit margin by a whole percentage point to 49.1 percent.
“The increase in gross profit margin was mainly attributable to the group providing a higher percentage of tag price on delivery to franchised distributors due to the increasing brand recognition, and there was better sales discount on both new and old products in self-operated channels, while the tag-cost-ratio further improved,” the company said.
Last year, Li Ning continued to focus on five core categories: basketball, running, training, badminton and sports casual.
At the customer front, Li Ning opened full-category flagship stores and China Li-Ning stores in shopping malls, while actively exploring new channel types.
“To enhance channel efficiency and optimize store structures, the company continued to accelerate the closure of loss-making stores, as well as upgrade and improve low-efficiency stores.”
The company ended the year with 6449 Li Ning points of sale in Mainland China, a net increase of 105 for the year, along with 1101 Li-Ning Young stores, a net increase of 308.
Questions & Answers
Q.What specifically contributed to the improvement in Li-Ning's gross profit margin?
What specifically contributed to the improvement in Li-Ning's gross profit margin?
The group's gross profit margin improved due to providing a higher percentage of tag price on delivery to franchised distributors, benefiting from increased brand recognition. Also, better sales discounts on products in self-operated channels and an improved tag-cost-ratio played a part.
Q.How did Li-Ning approach its retail presence and store efficiency last year?
How did Li-Ning approach its retail presence and store efficiency last year?
Li-Ning focused on opening full-category flagship stores and China Li-Ning stores in shopping malls, while exploring new channel types. The company also accelerated the closure of unprofitable stores and upgraded low-efficiency ones to enhance channel efficiency and optimise store structures.
Q.Which specific product categories did Li-Ning prioritise in its business strategy?
Which specific product categories did Li-Ning prioritise in its business strategy?
Last year, Li-Ning maintained its focus on five main product categories. These core areas were basketball, running, training, badminton, and sports casual wear. The company continued to develop its offerings within these segments.
Q.What was the final number of Li-Ning stores and Li-Ning Young stores in Mainland China at year-end?
What was the final number of Li-Ning stores and Li-Ning Young stores in Mainland China at year-end?
The company ended the year with 6,449 Li-Ning points of sale across Mainland China, which was a net increase of 105 for the year. Also, there were 1,101 Li-Ning Young stores, marking a net increase of 308.
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