Chow Tai Fook Jewellery Group (1929) H2 2025 earnings summary

Executive summary

• Revenue declined 17.5% year-over-year to HK$89,656 million, but operating profit rose 9.8% to HK$14,746 million, with gross profit margin up 550 bps to 29.5% and operating margin up 400 bps to 16.4%.

• Net profit attributable to shareholders was HK$5,916 million, down 9.0% year-over-year, mainly due to gold loan revaluation losses.

• Brand transformation included new image stores, successful product launches, and a sustainability blueprint, driving higher productivity and product mix improvements.

• Dividend per share was HK$0.52, with a payout ratio of 87.8%.

Financial highlights

• Gross profit increased 1.6% to HK$26,455 million, with margin expansion driven by higher-margin products and gold prices.

• Operating profit margin expanded to 16.4%; net profit margin improved to 6.7% from 6.1% in FY2024.

• SG&A expenses decreased 6.1% to HK$12,491 million, with SG&A ratio at 13.9%.

• Inventory balance reduced by 14% to HK$55 billion; CapEx controlled at HK$578 million.

• Operating cash flow net of leases paid was HK$16 billion, up 8% year-on-year; pro forma free cash flow reached HK$21 billion.

Outlook and guidance

• FY2026 expected to be a year of quality growth, with positive momentum in same-store sales and continued brand transformation.

• Management expects ROE to remain sustainable and same-store sales growth to turn positive during FY2026.

• Focus remains on disciplined cost and capital management, international expansion, and monitoring external volatility.