Giordano Int’l net profit slightly up

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Clothing retailer Giordano International Ltd. saw its net profit increase by 2 per cent year-on-year for the whole year of 2016 despite a decrease of 4 per cent in total sales.
According to its filing with Hong Kong Stock Exchange yesterday, the company raked in HK$434 million (US$54 million) in annual net profit for 2016, while total sales reached HK$5.14 billion.
The retailer explained in the filing that the decline in sales was due to ‘closure of non-performing stores in Greater China and weakened Renminbi reducing the translated sales from Mainland China.’
The company’s retail sales in Macau and Hong Kong fell by 5 per cent year-on-year to HK$927 million from HK$971 million, while comparable stores sales in the two SARs remained flat.
In addition, gross profit from the two markets slipped 1 per cent year-on-year to HK$640 million although gross profit margin rose slightly by 2.5 percentage points to 69 per cent compared to one year ago.
‘This was the result of better product mix from higher margin products and successful marketing campaigns, which increased store footfall,’ it wrote.
Meanwhile, the company’s sales in Mainland China fell 7 per cent year-on-year to RMB1.1 billion (HK$1.2 billion) during the period, while gross profit declined by 5 per cent year-on-year to RMB599 million. Comparable store sales in the Mainland dropped 2 per cent.
‘The likely ongoing, but gradual depreciation of the Renminbi will continue to benefit the Group insofar as average product cost is concerned,’ the company noted in its outlook.
As at the end of the year, the retailer was operating a total of 2,397 stores, of which 73 were in Hong Kong and Macau, a decrease of two compared to one year ago.
The board has proposed a final dividend of 15.0 HK cents per share for the year, compared to 14.5 HK cents per share for the year of 2015.