LI NING has presented a contradictory financial report. On March 19, the company announced its annual results for the period ending December 31, 2025. The financial report revealed that LI NING achieved a record high revenue of 29.6 billion yuan in 2025, a year-on-year increase of 3.2%. However, net profit declined by 2.56% compared to the previous year, settling at 2.94 billion yuan.
Against a backdrop of uncertain consumer market recovery and an overall acceleration in the sportswear industry's transformation, LI NING's stock price still rose by 8.6% on the day of the announcement, closing with a market capitalization of 55.4 billion Hong Kong dollars. This positive market response was attributed to the company's stable financial performance, ample cash reserves, and management's guidance forecasting high single-digit revenue growth in the future.
During the earnings communication meeting, Qian Wei, Executive Director and Co-CEO of LI NING Group, emphasized, "This year, we hope the company maintains a 'challenging' rather than 'risky' posture. 'Strengthening the foundation and actively expanding' is our future direction."
Nevertheless, operating in the intensely competitive sportswear sector, LI NING faces significant challenges. ANTA Sports leads the market, domestic brands are in close pursuit, and international giants continue to increase their investments in China. LI NING has reached a critical juncture where it must break through its growth stagnation.
**01. Peak Efficiency Gains: Where Have the Profits Gone?**
While LI NING's total revenue has shown steady growth, its net profit attributable to shareholders has declined year-on-year. This marks the third consecutive year, since 2023, that LI NING has experienced a situation of increasing revenue without corresponding profit growth.
The financial report attributed the decline in net profit not to a downturn in core operations but partly to strategic adjustments in the structure of domestic and foreign capital, based on factors such as exchange rate fluctuations and fund returns. These adjustments led to corresponding provisions for accrued income tax. This financial planning change caused the company's effective tax rate to rise from 26.7% in 2024 to 29.9% in 2025. The increased tax rate directly eroded net profit, becoming the primary driver behind the profit decline.
Apart from one-off financial factors, LI NING's reliance on "cost reduction and efficiency improvement" to maintain operational efficiency in recent years has been a double-edged sword. According to the financial data, by the end of 2025, the total number of LI NING brand offline stores was optimized to 6,091. The store contraction primarily affected directly operated channels, with a net reduction of 59 directly operated stores, decreasing from 1,297 in 2024 to 1,238. Consequently, revenue from directly operated channels fell by 3.3% year-on-year.
The strategic reduction of higher-margin directly operated channels, combined with intensified industry competition and increased pressure on sell-through, led LI NING to enhance promotional discounts. This resulted in a slight 0.4 percentage point decrease in the overall gross profit margin for 2025 compared to the previous year, further compressing profit margins.
However, cost reduction and efficiency measures have yielded some阶段性 results. By closing batches of underperforming and loss-making stores and meticulously managing various operational costs, LI NING saw its selling and distribution expenses decrease slightly by 0.1% year-on-year in 2025, controlling cost inflation.
Simultaneously, the inventory turnover days across all channels remained unchanged from the previous year, with a healthy inventory structure and a stable sales ratio between new and old products. This allowed the company to maintain a relatively agile operational state despite high inventory pressure within the industry.
LI NING also emphasized in its report that the group is intensifying efforts across four core areas: channels, retail, merchandise, and supply chain, to continuously enhance overall operational efficiency.
Furthermore, ample cash flow serves as LI NING's strongest defense against market uncertainties. The report showed that LI NING's net cash increased by 1.81 billion yuan year-on-year in 2025, reaching a total of 19.974 billion yuan. With sufficient cash reserves, concerns about short-term debt repayment capacity and risk resistance are minimal, providing financial security for future strategic investments.
"Cheng Weixiong, a footwear and apparel industry brand strategy consultant and founder of Shanghai Liangqi Brand Management Co., Ltd., commented that for a brand of LI NING's scale, cost reduction and efficiency improvement cannot solve fundamental problems. The key lies in creating growth momentum for the enterprise through revenue diversification."
The slowdown in LI NING's revenue growth also indirectly underscores the necessity of revenue diversification. Data shows that LI NING's year-on-year revenue growth rate has been declining annually, from 6.96% in 2023, to 3.90% in 2024, and further down to 3.22% in 2025.
**02. Dominance in Running Category: How Long Can the Story Last?**
Since last year, LI NING has focused on deepening its core advantageous categories while increasing investment in emerging niche segments, attempting to build a multi-category growth matrix and break the growth bottleneck of single categories. Qian Wei stated plainly during the earnings communication, "We will adopt a more proactive mindset and actions to explore opportunities in different sub-categories and will firmly invest in areas with potential for business expansion."
Running shoes, as LI NING's primary core category, remain the core engine for performance growth. In 2025, the running shoe category's gross merchandise value (GMV) grew by 10%, with its share of total GMV rising to 31%, marking five consecutive years of steady increase and becoming the core pillar driving revenue.
In recent years, running, due to its low barrier to entry and high popularity, has become the most favored sport among domestic consumers. The rapid rise of细分场景 such as competitive racing, daily jogging, and trail running has led to increasingly segmented consumer demand for professional running shoes. LI NING has capitalized on this trend by establishing a complete product matrix covering different runners and scenarios.
Product iteration capabilities have also been consistently demonstrated. In 2025, LI NING sold over 26 million pairs of professional running shoes annually. Sales of new products under the three core running shoe IPs—Fei Dian (Flying Electro), Chi Tu (Red Hare), and Chao Qing (Ultra Light)—exceeded 11 million pairs. The newly popular running shoe model "Yue Ying" (Surpassing Shadow) achieved cumulative annual sales of over 1 million pairs, confirming LI NING's product strength and market acceptance in the running shoe sector.
Concurrently, LI NING has continued to invest in cultivating the mindset of professional runners. The wearing rate of the Fei Dian series among runners who completed the Shanghai Marathon in under three hours ranked first, showing a significant year-on-year increase, further solidifying the brand's position in professional running shoes. Qian Wei also noted that collaborating with top-tier sports resources and making sustained investments to build consumers' perception of LI NING as a professional sports brand in the medium to long term is a core development goal for the brand.
Around 2024, badminton reached a new peak in popularity domestically. Data from the General Administration of Sport of China indicates that badminton has become one of the sports with the highest participation in China, involving up to 250 million people. LI NING's badminton team has focused on professional equipment like rackets and strings to capitalize on this domestic badminton boom. Last year, LI NING's badminton category revenue grew by 30%, with annual sales of badminton rackets exceeding 5.5 million units, a record high.
Beyond consolidating its six core categories—running, basketball, integrated training, table tennis, badminton, and sports leisure—LI NING has also increased investment in new categories like tennis and pickleball. "The future business scale and opportunities in these emerging categories might not become massive, but their potential should not be underestimated," Qian Wei remarked.
In terms of specific布局, LI NING's outdoor category is accelerating its rollout, with the first independent store "COUNTERFLOW by LI NING" officially opening in 2025, addressing the短板 in outdoor scenarios. The company is抢先占位 in pickleball and tennis, exclusively sponsoring the "LI NING Cup" China Pickleball Series (a long-term cooperation from 2025 to 2032) to deeply penetrate core sports communities and quickly establish brand influence in emerging fields. Additionally, LI NING continues to expand exclusive product series for the female market, signing actress Bai Lu as a brand ambassador in 2026, focusing on synergies with running, integrated training, and sports leisure categories to precisely leverage the female consumer market.
Currently, LI NING is gradually building a full-category matrix covering multiple sports scenarios and diverse consumer groups, centered on its professional sports R&D capabilities. It aims to overcome the developmental limitations of its single-brand strategy through multi-category布局, reducing reliance on any single category and seeking new growth突破口.
**03. Single Brand vs. Multi-Brand Strategy: Can the Olympics Resolve the Strategic Dilemma?**
LI NING adheres to a "single-brand, multi-category, multi-channel" development model. While progressing steadily, this approach has been consistently criticized by outsiders for offering limited growth potential. The gap with competitors is also becoming increasingly apparent, with the most direct comparison being ANTA Group.
Through years of international mergers and acquisitions, ANTA has brought brands like FILA, DESCENTE, KOLON SPORT, and Amer Sports under its umbrella, constructing a brand empire covering the spectrum from mass market to high-end, and from professional sports to outdoor fashion. In the first half of 2025, ANTA Group's revenue had already reached 38.54 billion yuan, with a market capitalization exceeding 200 billion Hong Kong dollars. Its multi-brand matrix has not only achieved leapfrog growth in revenue scale but has also effectively分散了 the operational risks associated with a single brand, forming a formidable competitive advantage.
LI NING attempts to narrow the gap through multi-category布局 but faces the challenge of strong competitors in every细分赛道.
The running market, LI NING's core territory, is already fiercely competitive. Xtep has built a专属的品牌壁垒 through years of deep cultivation in running. Overseas brands like adidas, On, and HOKA have精准抢占 the mindset of high-net-worth consumers, securing stable market share in the premium segment. Qian Wei also admitted that in such a competitive running market, there is no room for complacency, as any misstep could lead to being overtaken by competitors.
In the outdoor segment, LI NING has focused on three high-frequency scenarios: light hiking, suburban camping, and urban commuting. Related category GMV has achieved double-digit growth, but the overall base remains relatively small, and scale effects have yet to materialize. Meanwhile, the outdoor market is already dominated by brands like Arc'teryx, KAILAS, and PELLIOT across all price points from high-end to affordable. Nike and adidas are also accelerating their抢占 of the Chinese outdoor market by opening flagship stores and launching localized product lines.
The female market, on which LI NING places high hopes, is equally competitive. lululemon's net revenue in the Chinese market for fiscal year 2025 saw a high growth rate of 29%, leading the female athletic apparel segment. Multiple brands under the ANTA Group have also targeted the female product line, coupled with分流 from numerous local white-label products, making it difficult for LI NING to capture significant market share in the female segment.
The once advantageous basketball category is now mired in overall market sluggishness, making it difficult to drive performance. LI NING has proactively controlled the order scale for the basketball category while increasing investment in sports resources, channel development, and premium products, choosing to wait for the market to recover. In the short term, it cannot serve as a growth driver.
"The 'single-brand, multi-category, multi-channel' approach is not wrong, but the key is focus. Only by focusing on the core can one build core competitiveness," Cheng Weixiong stated, suggesting that LI NING needs to prioritize the development sequence of its core categories and, on that basis, enhance product pricing and strengthen brand image.
In the face of increasingly fierce market competition, strengthening brand power and building long-term competitive barriers are crucial for breaking the growth僵局 and realizing value.
Earlier, LI NING rode the wave of "Guochao" (national trend) to rapidly冲刺 the high-end market, significantly boosting brand awareness and premium pricing capability. However, as the Guochao trend subsided, the market buzz around "China LI NING" gradually declined. Subsequently, LI NING launched high-end running shoe单品 priced over 2,000 yuan featuring its self-developed "Beng" technology, which sparked dissatisfaction among some consumers.
Currently, LI NING is choosing to align with top-tier sports event resources to reinforce its professional brand image and leverage brand power. In 2025, LI NING once again became the official partner of the Chinese Olympic Committee. The cooperation covers over ten international top-tier events, including the Milan 2026 Winter Olympics, the Aichi-Nagoya 2026 Asian Games, and the Los Angeles 2028 Olympics. LI NING will provide full professional equipment support for the Chinese sports delegation, successfully positioning itself within key event cycles.
The value of event cooperation lies not only in brand exposure but also in directly driving sales conversion. Since beginning its long-term partnership with the Chinese Olympic Committee in 2009, ANTA's revenue has experienced leapfrog growth across multiple Olympic cycles, validating the commercial value of top-tier event resources.
Cheng Weixiong believes that LI NING can leverage its Olympic sponsorship status to increase revenue from higher-margin professional categories. However, based on current data, LI NING's footwear revenue grew by only 2.4% last year, indicating limited immediate benefit from the Olympic红利.
Nevertheless, LI NING is actively integrating Olympic elements, creating the "Glory Gold Label" product series, launching the new "Dragon Store" format, and releasing co-branded products identical to those used by the Chinese sports delegation. This aims to create a complete闭环 from "field of play highlights -> consumer interest generation -> point-of-sale purchase."
This闭环模式 of "competition validation, R&D iteration, consumer conversion" not only provides LI NING products with exclusive professional endorsement but also builds a dual barrier in consumer perception that competitors will find difficult to overcome in the short term. Qian Wei emphasized during the earnings communication that top-tier event cooperation is not pursued for short-term business conversion but is approached from a long-term brand empowerment perspective. The goal is to establish consumers' perception of LI NING as a "comprehensive professional sports brand" in the medium to long term. Even if this brings some short-term pressure on the financial statements, it is a necessary investment for medium to long-term business growth.
Today's LI NING is striving to stabilize its fundamentals through cost reduction and efficiency gains while preparing for a breakthrough by leveraging top-tier event resources and multi-category布局. It aims to broaden its growth space and reverse the trend of increasing revenue without profit growth. However, the transition from building capabilities to realizing value still requires time to验证. The patience of the capital market, consumer recognition, and the intense competition from rivals are all tests that LI NING must face.
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