Giordano International (709) H1 2026 earnings summary

Executive summary

• Revenue declined 1.0% year-over-year, mainly due to headwinds in the GCC region from Middle East tensions; excluding GCC, revenue rose 0.4% YOY, highlighting resilience in core markets.

• E-commerce sales grew 12.5% YOY, with GCC and Mainland China up 33.3% and 11.9% respectively, reflecting successful execution of the “Digital-First” strategy.

• Retail sales increased 0.5% YOY (2.9% excluding GCC), while wholesale revenue declined due to planned inventory recalibration in South Korea and China.

• Gross profit margin expanded by 1.6 percentage points to 57.2%, driven by channel mix, pricing, and sourcing improvements.

• Net profit attributable to shareholders was HK$108 million, down from HK$121 million YOY, mainly due to GCC underperformance.

Financial highlights

• Revenue: HK$1,914 million (down 1.0% YOY); gross profit: HK$1,094 million (up 1.7% YOY); operating profit: HK$155 million (down 13.4% YOY).

• Net profit margin: 5.6% (2025: 6.3%); basic and diluted EPS: 6.7 HK cents (2025: 7.5 HK cents).

• Cash and bank balances, net of bank loans: HK$650 million (2025: HK$722 million); inventories: HK$580 million (2025: HK$513 million).

• Interim dividend declared: 6.7 HK cents per share (2025: 7.5 HK cents), totaling HK$108 million.

Outlook and guidance

• Focus remains on revitalizing core brands, digital expansion, and operational discipline under the “Beyond Boundaries” five-year plan.

• Giordano 2.0 relaunch and digital-first initiatives in North America, Europe, and India are key growth drivers.

• Continued investment in omnichannel capabilities, supply chain resilience, and brand storytelling to drive profitable growth.

• Management expects working capital to normalize as inventories unwind and remains confident in long-term prospects despite macro uncertainty.