Earnings per share were HK$2.30. The company maintained interim dividend payout ratio at 35 percent to pay 80 HK cents a share as interim dividend.
Turnover rose 2.9 percent to HK$19 billion, with retail turnover growing 10.3 percent to HK$8.8 billion while income from wholesale dropped 2.9 percent to HK$10.2 billion.
"We had to cancel a lot of [wholesale] orders because customers were going out of business or couldn't pay anymore," said president Thomas Grote. He said wholesale orders booked between January and May this year declined by a single-digit percentage from a year earlier.
Amid the depreciation of the euro against the US dollar, the company posted net exchange losses of HK$127 million from a net gain of HK$28 million a year earlier.
Occupancy costs leaped 16 percent to HK$1.63 billion after expanding retail and controlled wholesale space by 11 percent and 7 percent, respectively. Esprit opened 77 retail stores and plans to open 25 more in the second half.
"As I have said, we will not see a better second half than the first half because the credit crunch is not over for our wholesale partners," said chairman and chief executive Heinz Krogner. He said the company has no plans to cut staff.
Despite his neutral outlook for the second half, Krogner said the company will not postpone expansion to gain market share. It plans to invest HK$600 million in opening new retail outlets in core markets and refurbishing existing stores in the second half.
The company had net cash of HK$3.848 billion as at December 31. Capital expenditure for this financial year amounted to HK$2 billion, and about HK$1.2 billion was spent during the first half, said chief financial officer Chew Fook-aun.
Krogner confirmed a company named Mayfair has approached him to learn more about Esprit but it is not a strategic investor. He said a presentation was made to the potential investor but he did not know if it has bought any shares.
Shares of Esprit rose 1.6 percent to close at HK$38.55 yesterday before the interim results were announced.
