Li Ning Company Limited reported a 2.8% year-on-year increase in revenue for the first half of 2026, totaling RMB 15.235 billion, while net profit rose to RMB 1.816 billion. The company’s net profit margin improved to 11.9% from 11.7% in the same period last year, supported by a 50.9% gross profit margin, up 0.9 percentage points. Operating profit margin, however, declined to 16.1% from 16.5%, reflecting higher marketing and operational costs.
Operating cash flow fell 60.4% year-on-year to RMB 954 million, while the company maintained a strong net cash position of RMB 19.391 billion. The board recommended an interim dividend of HKD 0.3512 per share, maintaining a 50% payout ratio. Revenue growth was driven by apparel, which rose 12% and accounted for 38% of total revenue, while footwear revenue increased 1% to 54% of the total. Professional products represented 57% of revenue, with wholesale channels contributing 46%, direct retail 23%, and e-commerce 31%.
Management cited a challenging domestic environment marked by weak consumer demand and extreme weather as key headwinds. Advertising and marketing expenses surged by RMB 377 million, rising to 11.2% of revenue, driven by Olympic sponsorships, marketing campaigns, and partnerships, including the Curry Brand. Operating cash flow declined as inventory costs rose 10% year-on-year, with total inventory turnover at four months across all channels.
The company lowered its full-year revenue guidance to low single-digit growth, down from prior expectations, and set its full-year net profit margin target in the medium to high single-digit range. Management warned of a difficult second half, citing persistent weak demand and weather-related risks. Despite the outlook, executives expressed confidence in the long-term prospects of the Chinese sportswear market and the Li-Ning brand’s competitive position.
Li Ning shares were trading down 1.45% at $14.25, near the lower end of their 52-week range of $13.93 to $23.42.
