Key Takeaways:
Chow Tai Fook Jewellery Group (1929.HK) saw its retail sales value fall 1.5% in the fourth quarter, as a sharp decline in Mainland China offset a continued recovery in Hong Kong and Macau.
The results for the three months ended March 31 were affected by “heightened external uncertainties and unprecedented high and volatile gold prices,” which impacted consumer purchasing behavior, the company said in a filing.
Retail value in Mainland China, which accounts for 83.7% of the group’s sales, decreased by 8.2% year-over-year. This was countered by a 58.5% surge in sales in Hong Kong, Macau, and other markets. Same-store sales in the mainland for franchised stores fell 5.8%, though directly operated locations saw a slight 0.2% rise.
The diverging performance highlights the jeweler's dependence on the mainland market, where consumer sentiment remains cautious, even as Hong Kong and Macau benefit from a strong rebound in tourism. The company’s stock has faced pressure from the slowdown in its primary market.
In Hong Kong and Macau, same-store sales grew 40.1%, driven by a 36.8% increase in Hong Kong and a 50.1% jump in Macau.
Despite lower overall sales volume, the average selling price (ASP) of weight-based gold jewellery climbed during the quarter. In Mainland China, the ASP rose to HKD11,900 from HKD7,800 in the same period last year. In Hong Kong and Macau, the ASP surged to HKD21,200 from HKD13,600.
The report signals a challenging environment in the company's largest market, offset by strength in tourist-driven locations. Investors will watch for whether the momentum in Hong Kong and Macau can continue to balance the weakness in Mainland China in the next fiscal year.
This article is for informational purposes only and does not constitute investment advice.
