Jan 14, 2020

Chow Tai Fook’s Same Store Sales Rise 2% in China, Drop 35% in HK in Q3 FY2020

Chow Tai Fook Jewellery Group Limited reported a turnround in its China operations with same store sales (SSS) rising 2% (Q2: FY2020: -7%), but the slump in Hong Kong & Macau, hit by weak consumer sentiment and stagnant customer traffic, continued with SSS down by a significant 35%.

Releasing its unaudited key operational data for the three months ended December 31, 2019, the jeweller also reported a 17% rise in retail sales value across all stores in China, but said that RSV in HK & Macau was down by 38%.

The uneven performance across main markets was also reflected in terms of product category-wise figures.

In Mainland China, SSSG of gem-set jewellery was 1%, while new POS opened in the past 12 months boosted the RSV growth of gem-set jewellery to 14% during the Quarter. However, SSS of gem-set jewellery in Hong Kong and Macau decreased by 53% during the Quarter as consumers held back spending, the retailer said.

In Mainland China, same store Average Selling Price (ASP) of gem-set jewellery was HK$6,700 (3QFY2019: HK$6,400) while that of Hong Kong and Macau was HK$11,200 (3QFY2019: HK$11,400).

Chow Tai Fook also said that gold products recorded a volume decline as a result of gold price volatility, dragging down SSS of gold products in both markets. Yet, ASP of gold products surged to HK$5,000 (3QFY2019: HK$4,200) in Mainland China and HK$10,200 (3QFY2019: HK$7,400) in Hong Kong and Macau during the Quarter. The average international gold price in the Quarter was 21% higher when compared to the same period last year, the jeweller noted.

The e-commerce business in Mainland China continued to flourish with retail sales value (RSV) rising 26% year-on-year while volume increased by 10% in the Quarter. However, the percentage of RSV settled by China UnionPay, Alipay, WeChat Pay or RMB to the total RSV of Hong Kong and Macau market, a proxy for sales contribution from Mainland tourists, declined to 34% in the Quarter.

Chow Tai Fook said it opened a net of 296 POS in Mainland China during the Quarter, including 279 net POS openings of Chow Tai Fook Jewellery stores (15 net closings of self-operated stores and 294 net openings of franchised stores). As at 31 December 2019, the Group had 3,789 POS in total.