Hong Kong's Forward Fashion Holdings' revenue up 1.9% in H1 FY23

28 Aug '23

2 min read

Pic: Forward Fashion Holdings

Insights

Forward Fashion Holdings reported a 1.9 per cent YoY revenue increase to HKD 505.4 million, mainly credited to economic recovery in Macau, Hong Kong, and Taiwan.
Gross profit declined by 3.6 per cent to HKD 235.4 million.
Online sales shrank by 39.2 per cent, and the wholesale segment declined with a negative growth rate of 91.8 per cent.

Forward Fashion Holdings, a Hong Kong based firm engaged in the retailing of fashion apparel of international brands, has reported a year-on-year (YoY) revenue increase of 1.9 per cent to HKD 505.4 million (approximately $64.42 million) in the first half of fiscal 2023 (H1 FY23), compared to HKD 495.8 million in H1 FY22. This growth has been attributed primarily to the economic recovery in Macau, Hong Kong, and Taiwan.

However, the gross profit for H1 FY23 fell by HKD 8.9 million, marking a YoY decrease of 3.6 per cent, settling at HKD 235.4 million. The gross profit margin also declined from 49.3 per cent in H1 FY22 to 46.6 per cent in H1 FY23.

Regionally, the retail stores in Macau saw an 8.1 per cent YoY increase in revenue, totalling HKD 225.6 million. Mainland China, however, saw a decrease of 8.9 per cent YoY, with revenue settling at HKD 228.1 million. Hong Kong and Taiwan reported a robust YoY revenue growth of 41.8 per cent, with sales reaching HKD 51.7 million, the company said in a press release.

Forward Fashion Holdings' mono-brand stores recorded a 5.4 per cent YoY decrease, while its multi-brand stores saw a substantial 35.6 per cent YoY increase. The online sales segment faced a significant shrinkage of 39.2 per cent. Additionally, the wholesale segment suffered from a negative growth rate of 91.8 per cent.

The group’s cost of sales increased by 7.4 per cent YoY to HKD 270 million, primarily due to the uptick in sales. Profit margins declined across regions. In Macau, it dropped by 530 basis points, largely due to stock clearances for store closures. In Hong Kong and Taiwan, the gross profit margins plummeted by 1,260 basis points, attributed to clearance sales of all self-operated retail stores in Taiwan. Meanwhile, in Mainland China, there was an improvement of 200 basis points in the gross profit margin, mainly due to fewer discounts offered.

Selling and marketing expenses reduced to HKD 187.5 million, a 7.1 per cent YoY decrease. This decline was mainly attributed to a HKD 6.1 million decrease in impairment loss on property, plant and equipment, a HKD 5.1 million reduction in operating lease expenses, and a HKD 3.6 million decline in advertising and promotion expenses.

General and administrative expenses also fell to HKD 49.4 million, a 3 per cent YoY decrease, largely due to a reduction in operating lease expenses of HKD 1.1 million.

Fibre2Fashion News Desk (DP)