HONG KONG, Aug 11 (Reuters) - Chinese sportswear maker Li Ning Co Ltd on Friday reported a 67 percent jump in half yearly profit, its fourth such rise in a row, helped by strong online sales and tight inventory controls.
China’s best-known domestic sports brand, which spent three years in the red amid fierce competition and inventory problems before bouncing back in 2015, raked in a net profit of 189.2 million yuan ($28.47 million) over January to June. This was higher than the 113.4 million yuan profit reported a year ago.
“With the support of national policies and the constant increase in public awareness towards their own health, the robust development of sports market demands brings about new opportunities to the current and future sporting goods industry,” Executive Chairman Li Ning said in a statement.
“We will intensify the promotional efforts for core products to consolidate our market share,” Li added.
The company’s total revenue increased 11 percent to 3.996 billion yuan in the first half, while its gross profit margin expanded 1 percentage point to 47.7 percent. Same-store sales grew mid-single digit over the period.
The number of Li Ning-brand outlets or sales counters in China amounted to 6,329 as of end-June, a net decrease of 111 from end of last year.
The company said it would continue to open or revamp key experience stores and strategically close down inefficient and loss-making stores, and will increase investment in reformation of digital operation.
Sports apparel firms in the mainland have predicted a boost in business as China looks to build its sports industry and consumers become increasingly health conscious.
Analysts expect China’s sports market to grow at a faster pace than its GDP in the next decade as consumption strengthens.
ANTA Sports Products Ltd, China’s biggest sportswear retailer by market value, saw its earnings climb to a record high in 2016. It is due to report its interim earnings on Tuesday.
$1 = 6.6460 Chinese yuan renminbi Reporting by Donny Kwok; Editing by Himani Sarkar