Retail fashion chain Esprit (0330) said first-half net profit fell 5.19 percent to HK$2.71 billion, beating market expectations, thanks to improved retail sales in the second quarter.
Earnings per share for the six months ended December 31 was HK$2.12. The dividend payout ratio stayed at 35 percent and an interim dividend of 74 HK cents per share was declared.
First-half turnover slid 3.1 percent year on year to HK$18.48 billion, with second-quarter revenue edging up 2.53 percent to HK$9.11 billion.
Retail sales jumped 9.5 percent to HK$9.62 billion in the first six months, boosted by a 18.5 percent surge in the second quarter. Wholesale turnover fell 13.9 percent to HK$8.74 billion.
"Very clearly, I am not satisfied ... the decline [in the wholesale business] is getting less but it's still a decline," said chief executive Ronald Van der Vis.
"China has the potential to become Esprit's biggest market," said Van der Vis. The fashion chain's distribution network in the mainland could triple to cover 450 cities from 150.
Germany was the Esprit's largest market, taking 45 percent of turnover as of the end of December. Esprit is now working to integrate its China and global businesses, Van der Vis said.
Esprit announced in December that it was buying the shares it did not own in its mainland joint venture from China Resources Enterprise (0291) for HK$3.88 billion. Shares of Esprit surged 7.92 percent to HK$57.90 yesterday.
