Chow Tai Fook Same-Store Sales Drop 8%Vinicy Chan
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.