WhatsApp
Email
Facebook
Twitter
LinkedIn
Revenue and profit at Luk Fook improved for the full fiscal year, as demand for gold products rose and sales of fixed-price jewelry products surged.
Sales jumped 29% to HKD 17.21 billion ($2.19 billion) for the year that ended March 31, the company said last week. Sales advanced 21% to HKD 9.78 billion ($1.25 billion) in Hong Kong and Macau and climbed 41% to HKD 7.42 billion ($946.2 million) in China. The retail business on the mainland continued to improve despite gold-price volatility during the year, the company added.
Meanwhile, profit spiked 89% to HKD 2.02 billion ($257 million), its highest level on record. Excluding the impact of gold-hedging losses, operating profit soared to HKD 164 million ($20.9 million) from HKD 6 million ($765,136) in the previous financial year. The retailer also benefited from effective product differentiation as well as targeted sales and marketing strategies.
“During the year under review, although the average international gold price in US dollars per ounce increased by over 50% year on year, consumers have gradually adapted to the high gold price, and therefore [it] did not have a significantly negative impact on demand for gold jewelry,” Luk Fook reported.
Revenue from gold and platinum products increased 22%, while sales of fixed-priced jewelry products ballooned 51%, thanks to rising gold prices and a greater sales mix of fixed-price jewelry.
Luk Fook expanded further into overseas markets, opening 20 new stores and meeting its full-year goal. However, the closure of licensed stores in fourth- and fifth-tier cities in China resulted in a net reduction of 282 stores worldwide.
Image: A Luk Fook store in Hong Kong. (Shutterstock)
