Chow Tai Fook Same-Store Sales Drop 8%

Chow Tai Fook Jewellery Group Ltd. (1929), the world’s biggest jeweler by market value, posted an 8 percent drop in third-quarter same-store sales as Chinese shoppers curbed spending amid a slower economy.

Sales at outlets open at least a year fell 11 percent on China’s mainland and 6 percent in Hong Kong and Macau during the three months ended December, the company said in a stock exchange statement yesterday.

The Hong Kong-based chain in November reported first-half profit that missed analysts’ estimates amid hedging losses on gold contracts and slower consumer spending. Revenue climbed 4 percent in the quarter as the jeweler added 70 outlets amid a push to reach Chinese shoppers in smaller cities.

The company expects to report a decline in same-store sales for this fiscal year, Finance Director Hamilton Cheng told reporters on a conference call yesterday.

The company, controlled by Hong Kong billionaire Cheng Yu- tung, is betting China’s increasingly affluent shoppers will help boost profits. Chinese consumers overtook U.S. shoppers in 2012 to become the world’s biggest buyers of luxury goods, consultancy firm Bain & Co. said last month. The company plans to add 45 to 50 outlets in its fiscal fourth quarter.

Chow Tai Fook rose 1.6 percent to close at HK$13 in Hong Kong trading yesterday. The stock fell 11 percent last year while the benchmark Hang Seng Index gained 23 percent.

To contact the reporter on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net

To contact the editor responsible for this story:

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.