Esprit Holdings Ltd. (330), the Hong Kong- based clothing retailer that makes most of its revenue in Europe, climbed the most in seven weeks in Hong Kong trading after saying same-store sales increased.
Esprit rose as much as 7.3 percent to HK$15.04, the biggest intraday gain since March 21, after yesterday reporting revenue at outlets open more than a year grew 0.5 percent in its fiscal third quarter ended March. The retailer will also get a HK$700 million ($90 million) writeback from store closures in North America, it said.
The increase in comparable sales follows a 4.6 percent decline in the six months ended December 31. Chief Executive Officer Ronald Van der Vis wants to turn the company around by boosting China revenue and improving fashion designs for the company that last year said its brand had “lost its soul.”
“The trading statement is on balance better than I expected,” said Anne Critchlow, an analyst at Societe Generale in London who has a hold rating on the stock. “Esprit has made a good start in its transformation plan.”
Esprit plunged about 73 percent in Hong Kong trading last year as European rivals Hennes & Mauritz AB (HMB) and Inditex SA (ITX)’s Zara lured customers away. Esprit reported a 74 percent drop in first-half profit in February amid efforts to restructure the business.
Esprit rose 7.1 percent to HK$15.02 as of 10:07 a.m. in Hong Kong trading and has climbed 49 percent this year, compared with a 10 percent advance for the benchmark Hang Seng Index.
Comparable-store sales, which strip out the effect of newly opened locations, rose 2.8 percent in Europe during the quarter, the company said yesterday. The company reported a 7.8 percent drop in third-quarter revenue.
Esprit said it had completed the divestment of its North American retail operations, with the last store closed in April.
To contact the reporter on this story: Vinicy Chan in Hong Kong at firstname.lastname@example.org