Chow Tai Fook, a Hong Kong-based jeweler, announced a 21% decline in retail sales for the second fiscal quarter compared to the same period last year. The company attributed this drop to soaring gold prices, which discouraged consumer purchases.
Additionally, a lack of tourism and reduced local spending during summer vacations negatively affected sales. The quarter ending on September 30 also faced challenges due to a weaker comparison with the same period last year. This was highlighted by lower jewelry purchases for China’s Golden Week holidays, which started on October 1.
In non-mainland markets, which account for 12% of Chow Tai Fook’s total revenue, retail sales fell by 31%. In China, making up the remaining 88%, sales decreased by 19%.
Same-store sales dropped 31% year-on-year in Hong Kong and Macau. Specifically, sales in Hong Kong fell by 28%, while Macau saw a larger decline of 40%. On the mainland, same-store sales decreased by 24%.
The company stated, “During the second quarter, macroeconomic factors, particularly record gold prices, continued to affect consumer sentiment.” It also noted that local travel in summer and changing spending habits among mainland tourists impacted the market in Hong Kong and Macau.
Despite these challenges, the decline in sales in China was less severe than in the first quarter. Meanwhile, sales in Hong Kong and Macau remained consistent. This improvement was attributed to increased sales during holiday periods and a rise in demand for gem-set jewelry on the mainland.
In terms of specific product categories, same-store sales of gold items, including jewelry, fell by 25% in China. Gem-set jewelry saw a decline of 28%. In Hong Kong and Macau, gold product sales dropped by 36%, while gem-set jewelry sales decreased by 17%.
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