Giordano International (709) H1 2026 earnings summary

Executive summary

• Revenue declined 1.0% year-over-year to HK$1,914 million, mainly due to GCC headwinds from Middle East instability; excluding GCC, revenue grew 0.4% year-over-year, highlighting resilience in core markets.

• Gross profit margin improved by 1.6 percentage points to 57.2%, driven by channel mix, pricing strategies, and sourcing efficiencies.

• Net profit attributable to shareholders was HK$108 million, down from HK$121 million year-over-year, with a net margin of 5.6%.

• E-commerce sales rose 12.5% year-over-year, with strong growth in GCC (+33.3%) and Mainland China (+11.9%).

• Interim dividend declared at 6.7 HK cents per share, totaling HK$108 million and maintaining a 100% payout ratio.

Financial highlights

• Operating profit fell 13.4% year-over-year to HK$155 million; EBITDA decreased 3.5% to HK$408 million.

• Group inventories increased to HK$580 million, with inventory turnover days rising to 128 days, partly due to strategic front-loading and regional volatility.

• Net cash position at HK$650 million, down from HK$722 million in 1H 2025.

• OPEX to revenue ratio rose by 1.6pp to 50.5%, reflecting higher digital platform and logistics costs.

• Basic EPS at 6.7 HK cents, compared to 7.5 HK cents in 1H 2025.

Outlook and guidance

• Focus remains on margin enhancement, digital acceleration, and brand revitalization under the “Beyond Boundaries” five-year plan.

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

• Management expects normalization of inventory and working capital in the second half, with continued investment in core capabilities and selective market expansion.

• August saw underlying business improvements in key markets, with Hong Kong up 12.1% and Vietnam up 8.5%.

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