Chow Tai Fook’s sales slid in the fourth fiscal quarter amid sluggish consumer demand and store closures brought on by the coronavirus pandemic.
Retail sales slumped 41% in mainland China in the three months ending March 31, while same-store sales — at branches open for at least year — plunged 50%, the jeweler reported last week. Both retail sales and same-store sales in Hong Kong and Macau plummeted 65% during the period. Same-store sales only include shops that Chow Tai Fook operates itself, as opposed to franchises.
Gold jewelry sales fell 54% on a same-store basis on the mainland and 67% in Hong Kong and Macau. The decrease was caused by heavy volatility in the price of gold combined with a slowdown in spending due to the spread of COVID-19, the company noted.
Same-store sales of gem-set jewelry dropped 64% in Hong Kong and Macau and 50% in mainland China.
During the period, the pandemic forced Chow Tai Fook to suspend operations at more than 40 locations in Hong Kong and Macau, and at 80% of those in China. The remaining stores were operating with shortened hours. The company has since reopened locations, with around 70% of its points of sale in mainland China and 64% in Hong Kong and Macau operational as of February 29.
The company expects group revenue to fall 11% to 13% for the year, while profit will drop 7% to 9% according to unaudited reports for the 11 months ending February 29, it said. Inventory as of February 29 was 15% higher than the same period a year ago.
