Esprit, one of the world's top ten fashion retailers, revealed on Thursday that its profit for the second half of the year dropped by 19%, falling short of market expectations due to sluggish sales and a weaker euro. The company acknowledged that the wholesale sector is still grappling with significant challenges ahead of the end of 2010.
In its filing with the Hong Kong Stock Exchange, Esprit stated, “We anticipate that the wholesale market will continue to face numerous difficulties during the first half of the new financial year.†The firm also highlighted that wholesale orders from July to November 2010 showed a year-on-year decline in local currency, but they reached a median level in terms of units. Notably, there was a monthly improvement in November, particularly in flash and repeat orders.
Analysts pointed out that the weakening euro and the slowdown in wholesale business have offset growth in retail sales, negatively impacting the company’s overall revenue. Additionally, rising costs related to value-added services, rent, and labor in the Asian market could further pressure Esprit’s profitability in the coming year.
The company remains heavily focused on the European market. For the upcoming financial year, it has allocated HK$2.2 billion for capital expenditures. Of this, HK$738 million will be used to open over 100 new stores and expand existing ones, while HK$406 million is earmarked for store renovations.
Esprit aims to boost its total retail sales by 5% to 10% in the new financial year, which ends in June 2011. However, its net profit for the second half of the fiscal year ending in June this year came in at HK$1.53 billion, down from HK$1.89 billion in the previous year. This result fell below the average forecast of HK$1.73 billion from 13 analysts surveyed by Reuters.
For the full fiscal year ending in June, Esprit reported a net profit of HK$4.23 billion, which was below both the market expectation of HK$4.439 billion and the previous year’s figure of HK$4.745 billion. The company’s stock has declined by over 13% this year, outpacing the 4.5% drop in the Hang Seng Index. On Thursday, before noon, the stock price rose by 1.4%.
Dyed Yarn Gauze,Vertical Shutter Screen,Jute Cross Window Screen,Gray Vertical Shutter Screen
Shaoxing Shaoqing Textile Co.,Ltd. , https://www.shaoqingtextile.com