Giordano International (709) H2 2024 earnings summary

Executive summary

• Revenue grew 1.2% year-over-year to HK$3,919 million for FY24, with a strong 5.9% rebound in the second half, driven by Southeast Asia, Australia, GCC, and online Mainland China.

• Net profit attributable to shareholders fell 37.4% to HK$216 million, mainly due to non-recurring expenses, reduced South Korea JV profit, and Greater China underperformance.

• Launched 'Beyond Boundaries' five-year strategy and implemented Quick Win initiatives, driving operational improvements.

• All Hong Kong stores profitable by year-end; maintained No.1 apparel brand status on H < TV mall.

• Board recommended a final dividend of 6.0 HK cents per share, totaling HK$97 million, with a full-year payout ratio of 104.5%.

Financial highlights

• Gross margin declined by 1.4pp to 57.0% due to higher online mix and clearance of aged inventory.

• Operating expense-to-revenue ratio increased by 1.5pp to 48.7%, mainly from non-recurring expenses including CEO severance and transformation costs.

• Operating profit dropped 25.0% to HK$377 million; operating margin at 9.6%.

• Basic EPS was 13.4 HK cents, down from 21.6 HK cents in 2023; diluted EPS at 13.3 HK cents.

• Store count decreased to 1,732 from 1,822.

Outlook and guidance

• 2025 outlook targets 3–5% positive revenue growth, with profit expected to grow faster than top line.

• Strategic focus on eCommerce acceleration, brand investment, and product innovation, especially in Mainland China.

• Ambition to achieve high single to low double-digit CAGR in net sales by 2030, with profit margin trending toward historic levels.