Sa Sa profits down more than half

Cosmetics sale company Sa Sa International Holdings Limited is expecting profits to plunge more than 50 per cent for the six months ended September, according to a filing sent to Hong Kong Stock Exchange.
These results are explained by ‘the worsening operating environment of the retail sector which has led to significant drops in both sales and gross profit and reduced operational efficiency’.
According to the previous interim report of the company, for the six months ended September 2014, Sa Sa posted a profit of HK$339.76 million (US$43.84 million), which at that time was also down by around 5 per cent from HK$357.38 million. Now, the profit for the period is expected to be less than HK$169.88 million.
Regarding sales for the second quarter of fiscal 2015/2016, Sa Sa has announced in another filing that turnover for the Hong Kong and Macau market declined 13.2 per cent year-on-year to HK$1.59 billion. Over this period, same stores sales dipped 10.1 per cent, while average sales per transaction declined 7.9 per cent to HK$346.
Second quarter results
In the filing sent to the Hong Kong Stock Exchange with data for the second quarter, the company says ‘overall consumer sentiment and Mainland Chinese tourist arrivals continued to be adversely affected by a number of factors with no significant signs of improvement’.
‘The strength of the Hong Kong dollar and the weaker yuan adversely affected the attractiveness of shopping in Hong Kong for both local consumers and Mainland Chinese visitors’, the company explains. ‘The impact of the ‘one-trip-per-week’ policy has gradually gained momentum, leading to a decline of 13.1 per cent and 10.1 per cent in the Group’s retail sales and same store sales in Hong Kong and Macau markets during the second quarter, respectively.’
It is also explained that the number of transactions of Mainland Chinese customers declined 4.1 per cent, and that their average sales per transaction went down 12.5 per cent year-on-year, dragging down the overall performance of the group.
Regarding the group performance, including Mainland China, Singapore, Malaysia and Taiwan markets, turnover declined during the second quarter of the year, 12.4 per cent year-on-year to HK$1.96 billion. Of the group’s 281 shops and counters, 110 are in Macau and Hong Kong.