Chow Tai Fook Jewellery Group recorded a revenue of HK$66,661 million for the year that ended March 31st 2019, representing a year-on-year increase of 13%, fuelled by point of sale (POS) openings and the strong performance of gold products.
Gross profit amounted to HK$18,602 million, and the adjusted gross profit margin was up by 70 bps to 27.9% in FY2019. Chow Tai Fook’s core operating profit surged by 24.4% to HK$6,972 million, thanks to an increase in adjusted gross profit margin and the benefit of operating leverage. Core operating profit margin improved by 100 bps to 10.5%.
FY2019 marked another year of growth for the group’s business. All product categories exhibited positive growth in FY2019, among which gold products demonstrated a relatively stronger performance. The revenue contribution of gold products increased by 170 bps to 61.1%. Same store sales in Mainland China registered an increase of 3.4% and grew 8.7% in Hong Kong and Macau.
The company’s retail network expanded to 3,134 POS as of March 31st 2019, with a net addition of 549 POS in FY2019.
In light of the macro headwinds and a tough comparison base… the group is cautiously optimistic for FY2020. “The US-China trade talks may take some time to settle in our view. Nonetheless, with the stimulus measures from the Chinese government such as lowering reserve requirement ratio, various tax cuts, spurring lending, particularly to small and medium-sized companies and enlarging infrastructure spending, we believe these would help to mitigate the impact on the economy and consumer sentiment,” the company stated.
Caption: The Hong Kong-based jeweller’s revenue growth was fuelled by store openings.