Li Ning 2025 profit beats consensus: shares rally 11%

Li Ning Company Limited reported full-year 2025 results on March 19 that topped analyst expectations despite a slight drop in net profit, sending the stock up as much as 13 percent in Hong Kong before it traded around 11 percent higher.

Profit down 2.6%, still ahead of forecasts

Net profit attributable to equity holders was RMB 2,936 million (approximately €373 million — see currency note below) for the year ended Dec. 31, 2025, down from RMB 3,013 million in 2024. The result was about 9 percent above consensus, helped by lower-than-expected selling and distribution expenses.

Store closures curb selling costs

Li Ning cut its directly operated store base to 1,238 locations by year-end from 1,297 at the close of 2024, a 4.5 percent decline. The smaller footprint reduced rent, payroll and store-level depreciation. Analysts at DBS Group Research said the outperformance came despite higher Olympic-linked marketing spend. Citi kept a buy rating but warned that any push to expand direct retail in 2026 could lift store-related costs.

Revenue in line, margins under pressure

Group revenue for 2025 reached RMB 29,598 million (approximately €3.76 billion*), up 3.2 percent from RMB 28,676 million a year earlier and broadly in line with forecasts.

By channel, franchised distributor sales grew 6.3 percent, raising that channel’s share to 46.6 percent of total revenue. E-commerce sales rose 5.3 percent, accounting for 29.5 percent of group revenue. Direct retail declined 3.3 percent, reflecting both store reductions and a shift in consumer purchasing scenarios.

Gross profit margin contracted by 0.4 percentage points to 49 percent, whereas direct retail gross margin contributed negative 0.3 percentage points to the decline and channel mix — a lower proportion of higher-margin DTC revenue — subtracted a further 0.2 percentage points. Wholesale gross margin improved by 0.2 percentage points, partially offsetting the drop.

Store footprint and inventory

Li Ning ended 2025 with 7,609 points of sale across its core brand and the LI-NING YOUNG children’s line, up a net 24 year-on-year. Growth came from franchise expansion and the children’s business: LI-NING YOUNG locations increased 3.4 percent to 1,518, while franchised stores edged 0.7 percent higher to 4,853.

The company said demand remained concentrated in higher-tier markets, with metropolises and first-tier cities accounting for nearly 60 percent of offline sell-through. Total omni-channel sell-through was flat versus 2024, with offline down in the low single digits and e-commerce direct retail up in the mid single digits.

Strategy: three growth drivers, one brand architecture

Li Ning said it sees demand supported by three trends:

• higher sports participation backed by government fitness policy,

• a shift in Chinese consumer spending toward sportswear,

• and the marketing boost from its partnership with the Chinese Olympic committee.

It described these drivers as structural rather than cyclical and said its strategy is to translate them into brand equity and sales.

The group is executing that strategy through what it calls a “Single Brand, Multi-categories, Diversified Channels” model and an expanding mix of store concepts, including LI-NING 1990, China LI-NING, Loong Store flagships, Super Outlets, omni-category flagship stores, LI-NING YOUNG and, launched in late 2025, COUNTERFLOW for outdoor. Management said the presentation outlines the formats as the main way it delivers what it terms “LI-NING’s experiential value”, spanning product, sport and shopping experiences.

Running leads the category; basketball under pressure

Category sell-through data reveals significant divergence. Running sell-through grew 10 percent year-on-year in 2025 and accounted for 31 percent of total omni-channel retail sell-through, the largest single category. Training was up 5 percent. Basketball, which accounts for 17 percent of the mix, declined 19 percent. Sports casual — 28 percent of mix — fell 9 percent.

In running, total professional shoe sales exceeded 26 million pairs for the year. The three core series — Super Light, Red Hare and Feidian — accounted for more than 11 million pairs between them. The Feidian 6 Ultra and Red Hare 9 Ultra, both equipped with the newly commercialized Super Boom Capsule midsole technology, were positioned at the performance end; the Super Boom Capsule claims a response time of 3 milliseconds and energy return of up to 95 percent. At the Beijing Half Marathon, Li Ning running shoes ranked first in wear rate among elite finishers within 90 minutes. Sponsored athletes claimed 73 championships and 145 podium finishes in international and domestic competition over the year.

In basketball, the group maintained three distinct pillars — professional basketball, the Way of Wade franchise and the BADFIVE street basketball sub-brand. The Way of Wade 12, launched at an event in Macau, was the first Li Ning basketball shoe to deploy dual-layer Super BOOM midsole technology with a full-length carbon plate. Jimmy Butler’s fourth-generation signature shoe, the JB4, was unveiled in San Francisco and described by the company as a benchmark for its professional product line. The BADFIVE streetball league spanned 16 provinces and 54 cities over five months — a community format that the company uses to sustain brand presence in the street basketball segment where its premium product lines have less reach.

Training doubles down on aerospace technology and women

In training, Li Ning leaned on its partnership with the China National Space Administration to develop and market the Aerospace Dynamic Thermal Technology Platform, applied to winter training jackets described as offering heat retention at rest and moisture permeability in motion. A targeted push toward female sports consumers, positioned around the “urban light exercise” scenario, drove women’s core jackets to a sell-out rate of more than 80 percent in the year.

Sports casual: cultural heritage as commercial strategy

Sports casual accounted for 28 percent of retail sell-through, but sell-through fell 9 percent, making it one of the two weakest-performing categories alongside basketball. The strategic response is to deepen cultural IP rather than adjust pricing or increase promotions. In 2025, Li Ning marked the 100th anniversary of the Palace Museum with a co-branded collection blending Eastern aesthetics and auspicious symbolism. The company also partnered with table tennis athlete Wang Chuqin for a China LI-NING campaign that combined retro sportswear with the brand’s 25-year legacy with the Chinese national table tennis team. LI-NING 1990, the group’s premium fashion-sport sub-brand, also expanded into golf apparel and footwear during the year.

Outdoor: entry through product and retail

Outdoor was Li Ning’s most significant category expansion in 2025. The group developed four product IPs: the Wanlongjia rainstorm-proof jacket series featuring dual-vent nanotechnology; the Counter series of all-terrain hiking shoes; the Longke light-rain protection series designed for layering; and the Lin series of urban hiking shoes aimed at younger consumers. Combined sales of the Counter, Lin and Xun (river-trekking) series exceeded 500,000 pairs for the year.

COUNTERFLOW, the first standalone outdoor concept store, opened in Beijing in late 2025, combining retail with community programming and experiential activities. Li Ning describes it as the brand’s formal entry into the outdoor segment at retail, where it competes with established specialists in a market driven by rapid growth in hiking and trail running participation in China.

Olympic moment and Milan runway

Advertising and marketing expenditure rose to 10.7 percent of revenue in 2025, up from 9.5 percent a year earlier, as the group stepped up Olympic-linked spending. Li Ning supplied award uniforms for China’s sports delegation at Milano Cortina 2026, and the delegation wore LI-NING apparel at the opening ceremony.

In a separate activation, the China LI-NING autumn/winter 2026 collection was shown at Milan Fashion Week under the theme “The Athlete in All of Us,” with Jackie Chan and Olympic table tennis champion Ma Long appearing on the runway. The presentation referenced the brand’s Olympic heritage and introduced a professional snowboard gear line.

In 2026, Li Ning plans to step up tech-led innovation and expand into new categories

Looking to 2026, Li Ning said it would prioritise technology-led product development across six core categories, while expanding into outdoor, tennis and pickleball. Li Ning, Executive Chairman and Joint Chief Executive Officer, said in a statement that the company would continue to deepen its “Single Brand, Multi-categories, Diversified Channels” strategy and capitalise on the competitive advantages available during the Olympic cycle.