Weak domestic demand, shrinking margins and higher costs shaped Li Ning’s first half. Online sales offered rare relief, while franchise partners kept growing. Ahead of the Olympics, the brand is betting on sports partnerships and expansion in emerging markets.
Chinese sporting goods brand Li Ning Company has reported a modest revenue increase but weaker bottom-line results for the first half of 2025. Revenue rose by 3.3 percent to RMB 14.82 billion (€1.89bn), while operating profit edged up 1.5 percent to RMB 2.44 billion (€311m). Net profit, however, slipped 11 percent to RMB 1.74 billion (€222m).
A small setback after a good run in 2024
Li Ning had shown growth in the previous year: in 2024, sales rose by just under 4 percent to RMB 28.68 billion (€3.66bn), with operating profit reaching RMB 3.68 billion (€469.7m). In comparison, the first half of 2025 looks like a small setback – slower revenue growth, declining margins and a noticeable drop in profits. According to the company – one of China’s leading sporting goods manufacturers – the reasons for this are sluggish consumption in the domestic market, weak brick-and-mortar retail sales and rising cost pressure.
The gross margin fell in H1 FY25 by 170 basis points to 49.4 percent, while Ebitda declined by 14 percent, corresponding to a margin of 19.4 percent (previous year: 22.6%). “We are operating in a challenging environment. Consumers are cautious, especially when it comes to spending that is not absolutely necessary,” the interim report states.
Online sales are picking up pace
E-commerce offered a ray of hope. Li Ning grew in the mid-single-digit range in the second quarter, while offline sales declined. The franchise business showed a small increase.
Despite the challenging market, the management team is spreading a sense of confidence: “We will continue to optimize our product and brand portfolio and focus on core segments in order to achieve long-term profitable growth.” This refers primarily to the running and basketball categories – the core of the brand, which has been competing with international players such as Nike and Adidas for years.
Olympic partnerships to provide tailwind
Despite poorer results in H1 FY25, Li Ning is sticking to its strategy: collaborations with the Chinese Olympic Committee are intended to boost the brand in the run-up to major sporting events. Li Ning also wants to grow abroad, especially in emerging markets. At the end of June, the group still operated 6,099 stores in China – a slight decline from the previous year, but management is focusing on quality rather than quantity: smaller, more modern store formats that are more closely integrated with online sales.
The outlook remains cautious. “We see headwinds in the short term, but we firmly believe that our strategy will strengthen Li Ning in the long term,” management said. Investors will probably have to swallow this for now – the figures tell a different story for the time being.
