Li Ning expects sales declines
Chinese sportswear maker Li Ning has said it expects first-half sales and profit margin to decline.
Li Ning said its profit margin and sales in the six months ended June 30 may have declined as competition intensified and costs increased. First-half sales are expected to fall 5%, and the margin of profit attributable to equity holders may narrow to as low as 6% from about 13% a year earlier, the company said in a statement.
“The expected margin is a lot worse than expected and expenses are much higher,” said Forrest Chan, a Hong Kong-based senior research analyst at CCB International Holding Ltd. He has an “underperform” rating on the company.
Li Ning said March 16 income growth in China “has not quite translated into a sustainable increase in purchasing power for sporting goods”.
