Sales at the company’s Hong Kong and Macau stores open for at least 12 months fell 9 percent from a year earlier as fewer customers visited the shops, Chow Tai Fook said yesterday. That compared with 7 percent growth in the previous quarter. Group sales rose 22 percent, slowing from a 26 percent increase.
Total same-store sales rose 4 percent, slowing from 11 percent in the third quarter and 15 percent over the Chinese Lunar New Year period. Same-store sales in mainland China rose 15 percent, up from a 14 percent gain in the previous three-month period, according to the seller of gems and gold chains.
A surge in demand last year due to falling gold prices and current softening demand in Hong Kong and Macau will make future sales comparisons challenging, Gloria Tsuen, a Hong Kong-based analyst at HK Capital Markets, wrote in a report today.
“Longer term, we continue to like the secular growth of China’s jewellery industry and Chow Tai Fook’s leading brand and strong positioning there, but will await the passing of near-term headwinds,” Tsuen said.
Tsuen reduced her estimate for the company’s sales this year by 4 percent and cut her recommendation on the stock to hold from buy.
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