Profit margin exceeds expectations, Li-Ning maintains a steady course as it accelerates into the new Olympic cycle

Text / Xingli

In 2025, as the consumer market gradually recovers and competition among sports brands intensifies, Li Ning delivered a solid annual report: revenue reached 29.6 billion yuan, up 3.2% year-over-year; operating profit margin increased by 0.4 percentage points to 13.2%, net profit was 2.94 billion yuan, with a net profit margin of 9.9%, outperforming market expectations.

Looking ahead, Li Ning’s business strategy remains steady. During the earnings briefing on March 20, Qu Wei, Executive Director and Co-CEO of Li Ning Group, stated, “Strengthening the foundation remains the top priority of operations, meaning we maintain a challenge-ready stance without taking risks, using a more proactive attitude and actions to explore business opportunities across different categories and segments. ‘Solid foundation, active expansion’ will be the main approach for Li Ning’s future management.”

Steady performance with professional categories as the “Anchor”

In recent years, Li Ning’s key tone has been “steady and pragmatic,” and the 2025 financial data vividly reflects this. In 2025, gross profit was 14.49 billion yuan, up 2.4%, with an overall gross margin of 49.0%.

Notably, in cash flow management, net cash from operating activities was 4.85 billion yuan, with cash reserves reaching 19.97 billion yuan, an increase of 1.81 billion yuan compared to the same period last year. Sufficient cash reserves not only provide a solid financial foundation for operations but also give the company strategic flexibility to hedge market fluctuations and quickly seize opportunities.

Behind this stable financial performance is Li Ning’s clear business logic: focus resources on core professional sports segments, strengthen brand value output, and continuously reduce costs and increase efficiency through channel integration and refined operations.

Analyzing Li Ning’s growth structure last year reveals that professional categories continue to be the “mainstay” of the core business. Currently, Li Ning Group continues to focus on six core categories: running, basketball, general training, badminton, table tennis, and sports leisure, while actively expanding into emerging segments such as outdoor, tennis, and pickleball.

As Qu Wei said during the earnings briefing: “Where we can expand business opportunities, we will do so decisively; where there are risks, we will stay steady.” This management philosophy is well reflected in the performance of core categories, with Li Ning’s running segment showing positive expansion and continuous breakthroughs over the past few years.

According to the latest financial report, the running category’s annual revenue increased by 10% year-over-year, with its share rising from 16% in 2021 to 31% in 2025, achieving a five-year continuous increase and becoming Li Ning’s largest category. This leap is driven by long-term technological accumulation and market awareness, from ultra-light to Chitu and Feidian series, with a professional running shoe matrix that directly enhances repeat purchases among core runners.

In addition to running, the badminton category also shows strong growth momentum. In 2025, revenue from this segment grew by 30% year-over-year, leading the industry. This achievement is no accident: since 2009, Li Ning has deeply cultivated badminton, and its long-term expertise and product strength have been fully unleashed amid the recent badminton boom. More importantly, the long-term layout has created capacity advantages, enabling rapid response to demand surges and efficiently converting brand potential into market share.

Seeking growth beyond “professional” categories, expanding growth boundaries

While consolidating the core professional categories, Li Ning’s growth logic does not stop at deepening existing markets. Confronted with the question of where incremental growth will come from, Qu Wei explained at the earnings briefing: “Our strategy is single brand, multi-category, multi-channel, so growth comes from categories and channels.”

While strengthening professional brand awareness and expanding market share, Li Ning is leveraging its category development capabilities to actively explore new categories, new audiences, and new channels, accumulating new momentum for future growth.

The outdoor segment exemplifies this strategic approach. In 2024, Li Ning officially established an independent outdoor category, targeting the casual outdoor market, focusing on hiking, nearby camping, and urban commuting scenarios. In just two years, this new business segment has begun to show results: outdoor revenue doubled in 2025.

Qu Wei said, “We believe Li Ning’s outdoor segment still has huge growth potential.” In 2025, Li Ning opened its first standalone outdoor store, “COUNTERFLOW,” and looking ahead to 2026, Qu Wei expects further development, including new store formats and channels, and aims to establish replicable operational models and profitable single-store strategies to lay the foundation for scaled expansion.

Additionally, in actively expanding new consumer groups and scenarios, the Glory Gold Label product line is noteworthy. Launched in 2025, this series features the Chinese Olympic Committee logo combined with the Li Ning brand logo, targeting urban consumers seeking quality lifestyles, meeting the needs of daily commuting, business, and light sports across various scenarios.

Qu Wei mentioned that this new series is driven by top sports sponsorships, mainly from a brand empowerment perspective, but they also seize opportunities to develop new categories and product lines.

At the end of last year, Li Ning launched a new store format called “Long Store.” During the Milan Winter Olympics, Li Ning also achieved its first “zero lag” synchronized release of co-branded products with the Chinese sports delegation, turning top event heat into consumer momentum. Qu Wei revealed that since the second half of 2024, Li Ning has been testing “pop-up” and “slow pop-up” formats nationwide for Long Stores and Glory Gold Label series, with high consumer acceptance and better-than-expected overall store performance. These experiments have boosted confidence and helped advance this new product line.

Regarding the market potential of emerging categories and product lines, Qu Wei remains pragmatic. He pointed out that compared to major categories like running and basketball, the future business space for new categories may not be as large, but it should not be underestimated. For example, in badminton, a few years ago, some thought it was a small niche, but in 2025, Li Ning sold 5.5 million rackets, with badminton revenue accounting for about 7%—roughly 2 billion yuan—making a significant contribution to the overall performance. Based on this experience, Li Ning’s continued expansion into outdoor, pickleball, tennis, and Glory Gold Label aims at potential explosive growth in the coming years.

At the channel level, Qu Wei breaks down incremental channel growth into two dimensions: first, improving efficiency of existing offline channels, i.e., how to enhance the performance of the 7,609 stores covering different market tiers; second, developing new stores such as outdoor stores and Long Stores. As of December 31, 2025, Li Ning’s sales points (including core and YOUNG lines) totaled 7,609.

Anchoring top-tier event resources, awaiting value release in the new Olympic cycle

If professional product lines have solidified Li Ning’s foundation, and new categories, new consumer groups, and new channels are opening up incremental space, then at the start of the 2026 Milan Winter Olympics to the 2028 Los Angeles Olympics cycle, Li Ning is entering a new growth window, awaiting value realization.

In the competitive landscape of sports brands, top-tier sports marketing resources are always the most scarce strategic assets. When consumer markets weaken and industry competition intensifies, the value of such resources becomes even more prominent. They are not only authoritative endorsements of brand image but also key to shaping brand culture and highlighting differentiated value in the medium to long term.

In May 2025, Li Ning announced its partnership as the official sportswear partner of the Chinese Olympic Committee from 2025 to 2028. During this period, from the Milan Winter Olympics, Nagoya Asian Games to the Los Angeles Olympics, Li Ning will appear on the podium of more than ten top international events with the Chinese sports delegation. This cooperation’s value exceeds short-term exposure benefits; it builds a solid brand momentum moat for Li Ning in the new Olympic cycle.

Qu Wei explained this strategic value clearly: “We evaluate the value of top sports event sponsorships from a long-term brand empowerment perspective. Overall, sponsoring and partnering with top sports events is not a marketing strategy for immediate business conversion but more about enhancing brand potential.”

He further elaborated, “We aim to build long-term awareness among consumers and sports enthusiasts of Li Ning as a professional sports brand through cooperation and investment in top sports resources. This is our core goal in partnering with top sports events.” Qu Wei also revealed that Li Ning will continue to increase investments in top sports resources and beyond, continuously fueling business growth.

This strategy was already evident at the Milan Winter Olympics this year. When the Chinese delegation appeared in Li Ning’s professional sports gear at the opening ceremony, and Chinese athletes repeatedly stepped onto the podium, Li Ning made its debut in the new Olympic cycle. According to Guojin Securities, “The Chinese sports delegation’s appearance in full Li Ning gear at the opening ceremony provided significant global exposure for the brand early in the event.” They also expect Li Ning’s performance in the 2026 Winter Olympics to be strong, with increased brand visibility supporting annual results.

If cooperation with the Chinese Olympic Committee is a key tool for strengthening brand potential, then a multi-layered layout with national teams deepens professional awareness. In 2025, Li Ning added a partnership with the Chinese fencing team. At this year’s Nagoya Asian Games and the 2028 Los Angeles Olympics, Li Ning will leverage top resources from the Chinese sports delegation and national teams in shooting, diving, table tennis, and fencing.

Standing at the start of the new Olympic cycle, Li Ning’s growth logic is clear: solidify the core with professional product lines, expand with new categories, and strategically deploy top-tier event resources to continuously release long-term brand value.

As the Milan Winter Olympics begins, a four-year cycle of brand value release is officially underway. With scarce resources and solid operations, Li Ning’s new cycle story is worth ongoing anticipation.

Editor: Lin Sen

【Source: Huaxia Times】