Chow Tai Fook Sales Slide at Start of Year

RAPAPORT... Group revenue at Chow Tai Fook fell 13% in the first two months of the fiscal year as a variety of challenges dented consumer demand."For fiscal year 2023, we expect that retail market performance in the mainland may still be affected by the pandemic and other macroeconomic factors," the company said last week. In its outlook for the year ending March 31, 2023, Chow Tai Fook cited "multiple uncertainties" that could affect sales, including the fluctuating prices of raw materials and shifts in consumer habits.Sales in mainland China slipped 13% year on year during the April 1 to May 31 period, the company noted. Meanwhile, in Hong Kong and Macau, revenue decreased 14% compared to the previous year.The declines come following positive sales during the fiscal year ending March 31, as the health situation began to improve.Sales jumped 41% to HKD 98.94 billion ($12.61 billion) for the 12 months, the company reported. The increase reflects the opening of a net 1,311 points of sale during the year, primarily in third-tier, rural cities on the mainland, which enabled consumers to shop more easily. Profit grew 11% to HKD 6.88 billion ($876.7 million).Revenue in China surged 46% to HKD 86.93 billion ($11.08 billion), as Chow Tai Fook expanded its network and the health situation recovered slightly. The mainland accounted for 88% of the company's total revenue. Sales of watches slipped 0.4% for the full year amid a temporary supply shortage.In Hong Kong, Macau and other markets, revenue rose 15% to HKD 12 billion ($1.53 billion). The growth was driven by steady local demand in Hong Kong, as well as recovering tourist spending and stable domestic consumption in Macau, which returned to pre-pandemic levels, Chow Tai Fook noted.Image: A Chow Tai Fook store in Beijing. (Chow Tai Fook)