Stagnant profit for Chow Tai Fook as mainland sales dip

Chow Tai Fook Jewellery’s (1929) net profit barely grew in the six months through September amid a weak consumer sentiment in China, but it remains confident in sustaining its recovery in the coming months. 

In the period, the jeweler’s profit inched up to HK$2.5 billion while revenue fell slightly to HK$38.99 billion. The interim dividend was raised by 10 percent to 22 HK cents. 

Gross profit margin declined by 0.9 percentage points to 30.5 percent due to smaller gold

price appreciation realized, but partially offset by the benefit from an increasing mix of fixed-price jewelery and retail business.

Sales in the mainland fell 2.5 percent, while those in Hong Kong, Macau, and other markets rose by 6.5 percent, driven by a revival in retail sentiment and foot traffic.

Same-store sales, a key financial indicator for retailers, climbed by 2.6 percent in the mainland and 4.4 percent in the two SARs, reversing the downward trend.

From October to November 18, the jeweler saw its retail sales soar by 33.9 percent, with same-store sales surging 38.8 percent in the mainland and 18.3 percent in the two SARs. 

It had 5,663 points of sale, or POS, in the mainland as of September, down by 611 from a year ago. The number for the two SARs and other markets both grew by 1 to 88 and 63, respectively.