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China Growth Rescues Chow Tai Fook Sales

Nov 28, 2019 10:29 AM   By Rapaport News
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Sales at Chow Tai Fook were down only slightly in the first fiscal half as growth in the Chinese market offset a downturn in Hong Kong.

Revenue fell 0.6% year on year to HKD 29.5 billion ($3.77 billion) in the six months ending September 30, the company said Thursday. Total sales in mainland China rose 12% during the period, as the Hong Kong-based jeweler expanded its store network. Same-store sales — at branches open for at least year — grew 1.8%. Sales in China made up 69% of the group’s revenue, the company said.

Meanwhile, total sales in Hong Kong and Macau dropped 20% as political unrest and rising gold prices weakened consumer sentiment. Same-store sales for the region plunged 28%, excluding licensed shops. Group profit fell 21% to HKD 1.58 billion ($201.8 million).

“Mainland China continued to be our main contributor, and accounted for around 81% of the group’s core operating profit, while Hong Kong, Macau and other markets registered a significant decline in core operating profit by 26% due to the uncertain situation in Hong Kong,” the company noted.

Gold sales in mainland China slipped 2% on a same-store basis, and plummeted 33% in Hong Kong and Macau. Sales of gem-set jewelry rose 4.1% on the mainland, but slid 25% in Hong Kong and Macau.

During the period, Chow Tai Fook opened a net 333 new locations in mainland China, and three in Hong Kong and Macau.

Image: A Chow Tai Fook store in Hong Kong. (Chow Tai Fook)
Tags: Chow Tai Fook, Rapaport News
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