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Chow Tai Fook Same-Store Sales Drop 8%

Jan. 11 (Bloomberg) -- Chow Tai Fook Jewellery Group Ltd., 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:

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