Li Ning (2331.HK) 3Q22 Operational update slightly soft; 4Q cautiously optimistic.
Li Ning released 3Q22 Operational Update whereby Same-Store Sales (SSS) registered a high-single digit growth for overall platform. By channel, retail (direct operations) rose mid-single digit, wholesale (franchised distributors) rose high-single digit, while e-commerce rose by mid-teens.
Point-of-sales recorded a net increase of 164 from 2Q22, or a net increase of 166 YTD to 6,101. Of which, direct retail recorded a net increase of 179 POS, while wholesale recorded a net decrease of 13 POS. Li Ning Young POS recorded a net increase of 63 since 2Q22, or net increase of 36 YTD to 1,238.
Full-year guidance is kept unchanged, where topline growth will achieve high-teens to low-20s, while net profit margin to maintain double digit.
The Company appears cautiously optimistic on 4Q22 progress. Overall 3Q22 retail discount did increase on a y-o-y basis, and q-o-q basis, and remains at a manageable level. Inventory levels also recorded an increase on an absolute level but remain at healthy levels.