Li Ning Company realized a 4.9 percent decline in annual operating profit to 4,887 million yuan renminbi (€690.5m) for the 12 months ended Dec. 31 as total revenues increased by 14.3 percent in local currency to RMB 25,803 million (€3.65bn). Retail sell-throughs, including online and offline, lifted higher by a mid-single-digit percentage. The annual gross profit, impacted by lingering pandemic effects and higher raw material costs, fell by 460 basis points to 48.4 percent from 53.0 percent.
Annual revenues rose by double-digits for footwear and equipment & accessories but dropped by 9.4 percent to RMB 10,708 million (€1.5bn). Footwear sales improved by 41.8 percent year-over-year to RMB 13,479 million (€1.9bn), and revenues for equipment & accessories rose by 30 percent year-over-year to RMB 1,616 million (€228.3m).
By product category, running and basketball sales rose by double-digits year-over-year, but both fitness (-17%) and sports casual (-6%) sales fell. Basketball sales bounced 25 percent higher, accounting for 29 percent of retail sell-throughs. Running raced upward by 13 percent to equal 19 percent of all revenues. Sport casual represented 39 percent of Li Ning’s turnover, while fitness equaled 12 percent.
The group is vowing to continue its channel expansion in Mainland China, focusing on big stores. Li Ning’s total number of points of sale rose 6.5 percent year-over-year to 7,603. Same-store sales in FY22 were up by high-single digits in the e-commerce channel but down in both retail (mid-single digits) and wholesale (low-single digits). While wholesale improved its percentage of overall revenues to 48 percent from 47 percent last year, retail only accounted for 21 percent of all sales versus 23 percent in FY21. E-commerce sales improved to 31 percent of the total, up from 22 percent in FY18 and 30 percent in FY21. The company said that revenue and sell-through balance between direct-to-consumer and wholesale helped Li Ning mitigate financial risk last year.
