The Hong Kong-based exporter, which supplies stores in the UK such as Primark and Marks and Spencer, said core operating profits fell by a fifth to $182m (£130m) from $227m for the six months ending June.
The firm, founded in 1906 in China, blamed a subdued retail environment in America and the EU, a slowdown in China and a fall in the oil price for the drop.
Turnover fell one per cent to $8.7bn and operating costs rose 4.3 per cent. Core operating profits fell 19.7 per cent while operating profit fell 23.7 per cent.
William Fung, the billionaire chairman of Li & Fung, said: “Despite challenging macroeconomic conditions, turnover remained steady in the first half of 2015 and business with our core customers grew. The foundation of our business remains solid.”
The group, which bought UK firm May Trading UK out of administration last December, makes most of its turnover in the US with the rest in Europe and Asia.
It said currency depreciation also reduced turnover.
The firm’s logistics division, which is mainly focused on China, continued to grow rapidly, however, with turnover rising by 36.3 per cent.
Li & Fung said it was facing disruption in its core supplier market as more retailers seek to take advantage of online shopping and a trend from larger retailers to source less from China.
Chief executive Spencer Fung said: “Looking at the larger picture, it is important to note that we are currently in a period of transition as a company.” He added Li & Fung was investing to cope with the change.