Giordano International profits plunge

Giordano International is set to report a heavy profit decline.

The casualwear retailer warned shareholders yesterday that underlying profit may fall by about 28 per cent, driving a 38-per-cent decrease in profit attributable to shareholders for the six months ended June 30.

Chairman and CEO Peter Lau said the board believes the decrease was largely confined to the Greater China Region, and “primarily attributable to the weak retail environment and poor market sentiment in those regions stemming from the Sino-US trade war”.

A factor in the profit figure was the adoption of new Hong Kong financial-reporting standards applicable to leases, which took effect on January 1 this year.

The company will announce its interim results next month. It did not reveal the extend of any sales decline in the profit warning.

In April, Giordano announced that sales in Greater China plunged by 17.7 per cent during the first quarter, dragging group-wide sales down by 10.8 per cent, or 8.5 per cent on a constant-currency basis.

In a stock-exchange filing on the eve of the holiday weekend the casual apparel retailer blamed the downturn on “uncertainty stemming from the Sino-US trade dispute and abnormally warm weather”.

Giordano sales in Indonesia, Thailand and Vietnam remained stable during the first quarter, and in the fledgling Middle East market rose by 10 per cent to HK$80 million, slightly compensating for the heavy impact of China.

By market, Mainland China sales fell from $378 million to $295 million, in Hong Kong and Macau from $248 million to $225 million and in Taiwan from $201 million to $161 million. In the rest of Asia-Pacific, they declined from $422 million to $398 million.

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