Luk Fook Revenue, Profit Bounce Back

RAPAPORT… Luk Fook’s revenue and profit surged in the first fiscal half amid a recovery in Hong Kong and Macau and the opening of a net 230 new stores in China.

Revenue jumped 67% year on year to HKD 5.59 billion ($717.7 million) for the six months ending September 30, the Hong Kong-based jewelry retailer said Monday. Group profit more than doubled to HKD 653.9 million ($83.9 million), compared to HKD 293 million ($37.6 million) during the same period in 2020.

Sales in Hong Kong and Macau rallied 113% to HKD 2.47 billion ($316.8 million) as local sentiment improved in the municipality. Revenue in Macau “increased substantially” as the government relaxed border restrictions, Luk Fook noted.

Sales on the mainland rose 43% to HKD 3.12 billion ($400.8 million), with the company opening several new locations. The waning price of gold also stimulated purchases of jewelry made from the metal.

Luk Fook will continue its China expansion in the second fiscal half, primarily in fourth- and fifth-tier cities, it said. Although the company is concerned it may see “slackened growth” during that period if there is a resurgence in Covid-19 cases, sales at the start of the period remain strong. Same-store sales — at branches opened more than a year — between October 1 and November 21 were up 35% year on year in Hong Kong and Macau and 20% in China.

“With the gradually relaxed border restrictions, the Hong Kong and Macau businesses are expected to have a continuous improvement,” the company said. “In the mainland…with the double circulation policy [a government strategy to increase local spending,] domestic consumption will be further encouraged. The group therefore remains optimistic.” 

Image: A Luk Fook store in Hong Kong. (Shutterstock)