Esprit The Chinese Market Is Deteriorating But Will Continue To Reform.

Esprit 0330.HK, the parent brand of the leisure brand, continued double-digit declines in the three quarter, and the fixed exchange rate decreased by 11.6%, narrowing narrower than the 16.2% and 12.5% decline in the one or two quarter.

However, the bad Asia Pacific market is against the trend. In the three quarter, the fixed exchange rate fell by 35.2%, which was worse than the 20% and 31.2% decline in the one or two quarter.

In terms of the Hong Kong dollar, the revenue in the third quarter ended March was down 17.7% to HK $3 billion 156 million, the same period in the corresponding fiscal year was HK $3 billion 837 million, of which Asia Pacific market income was HK $293 million, which fell by 37.6% compared with 472 million HK dollars in the three quarter of fiscal year 2017/2018, and the Chinese market in the Asia Pacific region dropped by 17.8% compared with sales. The weak is attributable to a drop in passenger traffic.

The German market recorded a 1.7% decline in comparable sales in the three quarter. The first two quarters recorded a comparable decline of 16.3% and 5.9%. As the largest market in the world, the German market gained 1 billion 599 million Hong Kong dollars in the three quarter, a decrease of 15.3% over the same period last year.

Other European markets performed slightly better in the three quarter, with a decrease of 11% in sales area and 8% in fixed exchange rates, while sales in Hong Kong dollars decreased by 14.4%, from 1 billion 477 million to 1 billion 264 million Hong Kong dollars, a decrease of 0.3% over sales and a decline of 15% and 3.6% in the one or two quarter.

In the three quarter, the total retail revenue of Si Jie global was HK $1 billion 119 million, and the fixed exchange rate decreased by 14.9%, which was better than the 15.2% decline in the sales area, which was 2.3% lower than the sales, which was greatly improved compared with the 14.1% decline in the first quarter and the 4.9% decline in the two quarter. Wholesale business revenue in the quarter was HK $1 billion 146 million, fixed exchange rate decreased by 11%, and sales area decreased by 9.8% during the period. Online channel revenue in the three quarter was HK $861 million, fixed exchange rate declined 7.9%, of which 96.3% of the European market was 6%, accounting for 3.7% of the Asia Pacific market electricity supplier income fell by 40.5%. During the period, Tmall traffic declined further, resulting in the poor sales of e-commerce.

Si Jie said that the quarterly performance improvement encouraged the company and believed that the reform was progressing smoothly.

The chief executive, Anders Kristiansen, launched a transformation plan at the end of November. It issued a transformation plan at the end of November to allocate HK $15-17 in one-time expenditure in the current fiscal year, to restructure the group structure and speed up the elimination of loss business, thereby greatly reducing the cost base. At the same time, by strengthening the brand and optimizing products, the sales will be strengthened, and the profit and loss balance of the group will be realized from two to three.

Under the recovery plan, the first two fiscal years are expected to be affected by restructuring, revenue will continue to decline, while 2020/2021 fiscal revenue will return to growth, while 2019/2020-2023/2024 revenue will meet the growth rate. The fixed exchange rate will be recorded in the high median digits. The average annual capital expenditure is about HK $200 million.

Under the transformation plan, the 2018/2019 financial year ended in the end of December, the largest loss in the medium-term world of HK $1 billion 773 million. Looking forward to the future, management will maintain the expected revenue growth in the 2021 fiscal year. In the medium term, the guideline for the 2019-2024 fiscal year's annual growth rate with median high digits in local currency will remain unchanged. Specific targets and strategic measures will be adjusted according to key performance indicators such as passenger flow, sales rate, Ping efficiency, same store sales growth and sales cost ratio. Author: Chen Yifei