Giordano International (709) H1 2025 earnings summary

Executive summary

• Revenue grew 1.6% year-over-year to HK$1,934 million for the first half of 2025, driven by 26.1% online sales growth and strong wholesale/franchise performance, despite macroeconomic and geopolitical headwinds.

• Gross margin declined by 3.3 percentage points to 55.6%, mainly due to channel mix shift toward lower-margin online and wholesale, strategic clearance of aged inventory, and higher merchandise costs.

• Net profit attributable to shareholders was HK$121 million, up 0.8% year-over-year, with EPS at 7.5 HK cents; interim dividend declared at 7.5 HK cents per share.

• Excluding the underperformance of Non-Giordano Brands in Indonesia and the South Korea JV, adjusted revenue and profit growth would have been stronger.

• Operating expenses as a percentage of revenue decreased to 48.9%, reflecting disciplined cost management.

Financial highlights

• Operating profit fell 11.4% year-over-year to HK$179 million; EBITDA decreased 7.4% to HK$423 million.

• Group same-store sales rose 1.1%; global brand sales declined 1.5% year-over-year.

• Inventory turnover improved by 11 days to 108 days; inventory balance at HK$513 million.

• Cash and bank balances (net of loans) increased to HK$722 million.

• Basic earnings per share were 7.5 HK cents (2024: 7.4 HK cents).

Outlook and guidance

• Management expects gross margin to improve in the second half as inventory levels normalize and sourcing becomes more efficient.

• The 'Beyond Boundaries' 5-year strategy focuses on brand revitalization, digital-first initiatives, winning in Greater China, and organizational agility.

• New brand launches (e.g., Giordano Concepts) and digital expansion are planned for the second half of 2025, targeting younger, digitally savvy consumers.

• Continued investment in omnichannel and e-commerce capabilities, with plans to expand digital offerings and improve supply chain efficiency.