LI NING(02331)2024-04-23 22:44Financial Data and Key Metrics Changes - In Q1 2024, the company's overall revenue increased by a low single-digit percentage year-on-year, with offline sales declining slightly while online sales grew by 20%-30% [1][2] - The same-store sales (SSSG) decreased in Q1, with direct sales and wholesale down by low single digits and mid-double digits respectively, while e-commerce saw a growth of 20%-30% [1][2] - The inventory turnover ratio improved to around 4.0, with nearly 90% of inventory being new products within six months [1] Business Line Data and Key Metrics Changes - Direct sales performance was better than wholesale, driven by outlet stores, with same-store sales for direct and wholesale both experiencing double-digit declines [1][2] - The total number of stores decreased by 26 compared to the end of last year, with direct stores increasing by 1 and wholesale stores decreasing by 27 [2] Market Data and Key Metrics Changes - The company is focusing on Southeast Asia for overseas expansion, with plans to open stores in markets like Singapore, Malaysia, Thailand, Indonesia, and the Philippines [6][7] - The company aims to maintain a steady growth in the domestic market while exploring overseas opportunities as a supplementary strategy [6][7] Company Strategy and Development Direction - The company plans to enhance its product offerings and marketing strategies, particularly in professional categories like basketball and running, while also focusing on low-tier cities [6][13] - The marketing budget will be directed towards professional categories, leveraging resources from CBA and other events to strengthen brand presence [6][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the annual performance guidance, with expectations of low double-digit net profit margin and mid-single-digit revenue growth [4][5] - The company anticipates a gradual improvement in sales performance in the second half of the year, especially in Q4, due to lower base effects [5] Other Important Information - The company is not planning significant channel expansions this year, with a focus on product upgrades and maintaining healthy inventory levels [9][11] - The new CMO has been instrumental in integrating marketing resources and enhancing brand strategy, with plans for significant promotional activities around the upcoming Olympics [10] Q&A Session Summary Question: What is the status of wholesale revenue and inventory? - Management indicated that both wholesale and direct sales have healthy inventory levels, with a turnover ratio of 4-4.5, and no adjustments to Q2 shipments are planned [3] Question: How are the new product lines performing? - New products like the "Ultra Light 21" and "Red Rabbit 7" have shown good growth, with the "Red Rabbit" series particularly popular among students, achieving nearly 50% growth year-on-year [3] Question: What are the expectations for the semi-annual report? - Management maintained the annual performance guidance, expecting revenue growth to be lower in the first half due to high base effects [4] Question: What is the outlook for the e-commerce channel? - E-commerce performance exceeded expectations in Q1, driven by a return of online traffic and effective price control, with hopes for profit margins to recover to over 20% [12] Question: How is the company addressing competition in lower-tier cities? - The company has a foundation in lower-tier markets and plans to expand product offerings to meet local demand, focusing on running and basketball shoes [6][13]