Esprit Full Year Profits Rose At The End Of Fiscal Year With HK $5 Billion 220 Million Net Cash.

According to the world clothing shoes and hats net, Esprit Holdings Ltd. Ltd. (0330.HK)

The limited company released the annual report. The 2016/2017 financial year ended June 30th with a net profit of HK $67 million, up 219% from HK $21 million in the same period last year.

In the 2016/2017 fiscal year, the global revenue of HK $15 billion 942 million, compared with HK $17 billion 788 million in the same period last year, was 10.4%, while the fixed exchange rate decreased by 8.7%, although the corresponding controllable sales area also decreased by 8.5%.

In the financial year, the gross profit of the company recorded HK $8 billion 230 million, down by 7.8% and gross margin by 140 basis points to 51.6%.

Si Jie global said that although the net profit was not large, the main reason for the improvement of the group's annual performance was the substantial improvement in its basic business. The ex dividend profit excluding the special items rose by HK $386 million. Under the prudent cash management system, the group had a net cash of HK $5 billion 220 million at the end of the fiscal year, and there was no debt. The remaining funds were enough to enable the group to invest in sales growth and further reorganization measures.

As a result, it launched its stock buyback in August 9th and will continue to buy back according to the current market conditions and other related factors. The share repurchase also reflects the group's confidence in the long-term business prospects.

Si Jie universal said that the group's fundamentals improved mainly because it accelerated the elimination of no profit area, that is, closing down the loss shops; commercial action was taken to protect gross margins, including the reduction of promotional efforts, the reduction in prices and the discount to wholesale partners; decisive reduction of recurrent costs and the acceleration of closing the loss shops, so that the group could achieve a cost reduction plan of HK $1 billion a year ahead of the original plan.

Looking forward to the future, Si Jie world will mainly carry out brand younger, product upgrading, new generation channel, market scale optimization and expansion, and reduce cost construction.

In the fiscal year of 2016/2017, Si Jie global closed the retail store area of 19076 square meters, an annual decrease of 6.5%, closing 95 shops to 666 stores, and 441 stores in the same period decreased by 5.2% compared with the same store sales.

During the period, the income of the group retail (excluding e-commerce) fell 12.7% annually and the Ping effect fell by 1.3%, but the value of Maori per square meter increased by 5.4% per year.

Wholesale business closed shop area of 36316 square meters, an annual decrease of 10.2%, wholesale income fell 8.8%.

Group largest

Revenue fell by 7.3%, fixed exchange rate declined by 5.6%, European business performance improved, and sales area fell by 10.1%. Fixed exchange rate sales fell by only 9.2%; Asia Pacific markets also improved in the case of large closes, while fixed exchange rate declined by 17.5%, which was better than the 18.5% reduction in sales area, with an increase of 43.1% in e-commerce channel revenue.

In the fiscal year of 2016/2017, the revenue of Si Jie global electric business reached HK $4 billion 32 million, accounting for 25.3%, but only 2.9% year-on-year.

Group chief executive Ma Hao Si at the Wednesday earnings conference said that this autumn weather in Europe improved, I believe that will not repeat the performance of last autumn's downturn.

The company purchases in US dollars and sells mainly in Europe. If the euro continues to be strong, it is expected to improve the marginal profit, and the company will also hedge against the exchange risk.

Mr Ma points out that the company has ample cash reserves and will assess the best way to use it. Dividend policy should be left to the board for discussion.

The company's management will consider repurchase from time to time, without setting the upper limit.

Because of the small profits in the financial year of 2016/2017, Si Jie said that it would not send final interest.

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