* H1 net profit HK$61 mln vs loss of HK$238 mln year ago
* Revenue slips, interim dividend skipped
(Adds details of results and company comments)
By Donny Kwok
HONG KONG, Feb 22 Esprit Holdings
swung to a first-half profit from a loss in the year-ago period
as the clothing company trimmed operating costs, but weak
consumer demand due to a slowing Chinese economy and tough
online competition hurt revenue.
The Europe-focused retailer is in the midst of an ambitious
multi-year revamp that has included store closures, price
adjustments, new return policies, and technology and
Esprit has been actively restructuring its retail footprint
and reduced promotional activity in Asia Pacific amid lower
consumer traffic in the region, while unusually warm weather in
Europe also affected its sales.
The company said on Wednesday it posted a net profit of
HK$61 million ($7.9 million) for the six months ended in
December, compared with a net loss of HK$238 million for the
same period a year earlier.
Revenue for the period was HK$8.32 billion, down from HK$9.3
billion a year earlier. Esprit said it is not paying an interim
dividend for the half-year.
"The economic growth slowdown in China has dampened
consumption sentiment, resulting in reduced traffic to the malls
across the region, including shopping and tourist destinations
that are key for Esprit," the company said in a statement to the
Hong Kong stock exchange.
The closure of unprofitable stores, with China accounting
for a large chunk of the reduction, was fundamental in order to
improve the results of the group, it said.
Going forward, Esprit said it aimed to continue executing
its strategic plan with a primary focus on improving the
Last week, Swedish budget fashion retailer H&M
reported an 8 percent increase in sales in January, falling
slightly short of a preliminary reading, amid tougher
competition in the budget segment and from online-only players.
Esprit had said in October that its revenue fell 11.8
percent in local currency terms for the first quarter ended in
September, with Germany falling 8.4 percent, the rest of Europe
and North America sliding 11.9 percent, and Asia Pacific
plunging 23.9 percent.
Shares of Esprit have risen 2.8 percent so far this year
after a 29 percent drop in 2016. That compared to a 9.4 percent
rise in the benchmark index so far in 2017.
($1 = 7.7608 Hong Kong dollars)
(Editing by Anne Marie Roantree and Muralikumar Anantharaman)