HONG KONG: Chow Tai Fook Jewellery Group Ltd., the world’s largest listed jewelry chain by revenue, reported a 25 percent decrease in full-year profit as sales struggled in mainland China and major markets such as Hong Kong and Macau.
Net income for the 12 months ended March fell to HK$5.46 billion ($704 million) from HK$7.27 billion a year earlier, Hong Kong-based Chow Tai Fook said Friday. That compared with the HK$5.9 billion average of 23 analysts’ estimates compiled by Bloomberg.
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The jeweler’s sales have been hit as Chinese shoppers cut back on luxury spending as China’s economic growth slows and the government mounts an austerity campaign. Sales in Hong Kong also suffered in the second half of 2014 as pro-democracy protests forced some stores to close.
Same-store-sales at outlets open at least a year fell 24 percent, Chow Tai Fook said. Revenue dropped to HK$64.28 billion, compared with the HK$66.3 billion average analyst estimate.
Chow Tai Fook reported in April that same-store-sales fell 16 percent in the three months through March, dragged down by a 9 percent drop in mainland China and a 21 percent plunge in Hong Kong, Macau and other markets.
The jeweler “may announce shop closures in Hong Kong and Macau at its results meeting” on Friday, with the aim of cutting rent costs, Bloomberg Intelligence analyst Catherine Lim wrote in a June 4 note.
