Sa Sa International Holdings (0178) yesterday said its net profit for the year to March fell 14.8 percent to HK$326.7 million due to a combination of adverse factors.
It cited the continued drop in mainland tourist arrivals to Hong Kong which dragged sales, a weaker yuan and changing consumer preferences.
Despite the drop in earnings, the board has recommended a final dividend of 80 HK cents.
Basic earnings per share were 11.2 HK cents, down from 13.2 HK cents a year earlier.
Its turnover in Hong Kong and Macau amounted to HK$6.27 billion. Revenue of same-store sales fell 1.8 percent year on year. The average sales value per purchase of mainland China tourists and local consumers fell 4.4 percent and 2.1 percent, respectively.
Overall turnover in China fell 3.9 percent to HK$276.5 million, while same-store sales dropped 3.4 percent. The loss in China amounted to HK$15.1 million.
Sa Sa said it will improve its product mix and focus in the mainland market by promoting non-Korean products, notably those from Taiwan and Japan. It said turnover in Taiwan dropped 24.4 percent to HK$195.1 million year on year, while same-store sales in that jurisdiction fell by 16.8 percent. It cited as culprits continued decline in mainland Chinese visitors to Taiwan and poor consumption sentiment.
The cosmetics retailer said restructuring of the management team led to the deterioration in sales performance in the first half of the financial year.
"This is not the first year that Sa Sa experienced a difficult economic environment and the complex challenges of an evolving market," said chairman and chief executive Simon Kwok Siu- ming.
He underscored the significant potential in the development of e-commerce, with its integration with physical stores and with the offer of products that are directly responsive to changing consumer tastes and trends.