Chow Tai Fook reported profit tumbled 46 percent in the past fiscal year as fewer tourists visited Hong Kong and a downturn in Greater China reduced consumer spending.
Profit slumped to $383.6 million (HKD 2.98 billion) in the 12 months that ended March 31, the Hong Kong-based jewelry retailer said. Revenue slid 12 percent to $7.3 billion (HKD 56.59 billion). Jewelry sales in mainland China dropped 11 percent and in Hong Kong and Macau declined 15 percent.
Tourist arrivals from the mainland retreated 8.6 percent in Hong Kong and 3.7 percent in Macau during the fiscal year, the jeweler pointed out. Mainland China contributed more than 50 percent of group revenue during the year, a figure that has increased over the past three years. The jeweler said it is still “confident” about the long-term growth potential in the region.
The “persistently weak retail sentiment” and a “decline” in the number of tourists, particularly from the mainland due to a “strengthening” of the U.S. dollar, continued to affect operations, Chow Tai Fook said.
“The increasingly affluent and sophisticated Chinese consumers continue to look for more personalized products and shopping experience,” the company added.
The company, however, pointed out its core operating profit – a non-IFRS measure that Chow Tai Fook believes is a useful measure of its operational performance – fell 24.5 percent, a better outcome compared with net income.
