Esprit Maintains Year-End Operating GPM Guidelines European Operations Still Difficult

Esprit <00330. HK> Chief Financial Officer Zhou Fu'an stated at the investment seminar that although the gross profit margin in the first half of the year (July to December) rose to 4.3%, higher than the previous full-year guidance, the cost will increase in the second half of the year. The operating margin in the summer (the second half of the year) was also lower than that in the first half of the year. Therefore, the guidance for maintaining the gross operating margin for the full year was 1-2%.

Zhou Fu'an stated that the timetable for refurbishing traditional stores into concept stores will be postponed and is now waiting for further sales response from the two concept stores opened earlier.

However, he stressed that it is currently located in Cologne, Germany, where the average unit price is higher than traditional stores.

The Group's provision for closed stores in the first half of the year is sufficient. Only about 10-20% of existing stores still report losses. Markets such as Australia and New Zealand have only recorded slight losses, which are different from the huge losses of the US market. Operation in Europe remains difficult.

Zhou Fu'an added that he is confident in the quality of the Group's products. The product maintains its current market position, is 10-15% more expensive than the "Zara" brand products, and is 25% more expensive than the "H&M" brand products, and reduces the number of in-store products to improve Purchase efficiency.