2025-07-03 15:28Summary of Li Ning Company Conference Call Industry and Company Overview - The conference call discusses Li Ning Company, a prominent player in the sportswear industry, focusing on its performance and strategies for 2025 and beyond [2][3][32]. Key Points and Arguments Sales Performance - In Q2 2025, both online and offline sales experienced negative growth due to factors such as the timing of the Dragon Boat Festival, adverse weather conditions, and early pre-sales for the 618 shopping festival [2][3]. - The overall sales trend in May and June did not meet expectations, with GMV during the 618 period falling short of targets, although e-commerce discounts improved [3][5]. Store Optimization and Strategy - Li Ning plans to close 201 stores in 2024 and an additional 10-20 stores in 2025 to enhance the efficiency of existing locations [2][5]. - The company aims to open 30-40 new wholesale stores to penetrate untapped markets [5]. - Store optimization includes adjusting channel structures, product offerings, and enhancing the efficiency of existing stores [6]. Marketing and Product Development - The COC marketing strategy will focus on the Glory series, which aligns with the Olympics, featuring national flag designs [7][9]. - New products primarily consist of casual commuting gear, priced slightly above standard products, targeting the mass market [8]. - The running category is performing well, while the basketball category has seen significant declines, prompting the company to implement volume control measures [15][16]. E-commerce and Channel Performance - E-commerce sales are dominated by Tmall and JD.com, accounting for approximately 50% of total online sales, with Douyin contributing over 20% [4][17]. - The performance of high-tier city stores is weaker compared to lower-tier cities, with the latter showing better results [4][18]. Financial Outlook and Inventory Management - The company maintains a healthy inventory level, with a stock-to-sales ratio of approximately 4-5 months as of the end of June [5]. - The gross margin pressure is anticipated in direct and e-commerce channels due to increased discounts compared to the previous year [25]. Future Growth and Market Expansion - Li Ning is focusing on expanding its presence in emerging markets, particularly Southeast Asia, through a newly established joint venture [26][27]. - The company is also investing in niche categories like golf and pickleball, with plans to enhance brand awareness through targeted marketing and sponsorships [28]. Children's Wear and Other Segments - The children's wear segment is identified as a significant growth area, despite facing challenges in the current consumption environment [21]. - The company plans to introduce new campus store formats to support the growth of its children's wear business [21]. Long-term Strategy - Over the next 1-3 years, Li Ning aims to increase investment in professional sports resources and expand its product offerings to align with long-term market trends [33]. Additional Important Insights - The company has established a dedicated team for Olympic-related activities, focusing on product planning and marketing strategies [12]. - The average sales price (ASP) is expected to stabilize or slightly decline in the second quarter due to seasonal changes and discounting strategies [22][23]. - The performance of outlet stores is significantly better than that of full-price stores, contributing positively to overall profitability [21].