Giordano International (709) H2 2025 earnings summary

Executive summary

• 2025 was a year of transition, focusing on strengthening fundamentals, go-to-market strategy, and internal capabilities as part of a five-year growth plan.

• Group revenue decreased by 1.7% year-over-year to HK$3,854 million, mainly due to non-core brands in Indonesia, while core business revenue remained stable.

• Net profit attributable to shareholders rose slightly to HK$217 million, with net margin at 5.6% and basic EPS flat at 13.4 HK cents.

• Gross margin narrowed by 1.2pp to 55.8%, but improved by 0.6pp in 2H compared to 1H.

• Continued investment in the 'Beyond Boundaries' strategy, emphasizing digital transformation and market revitalization.

Financial highlights

• Group revenue: HK$3,854 million, down 1.7% year-over-year.

• Gross margin: 55.8%, down 1.2pp year-over-year, but up 0.6pp in 2H.

• Operating profit fell 17% YOY to HK$313 million, with operating margin at 8.1%.

• OPEX to revenue ratio increased by 2.0pp to 50.7%, reflecting strategic investments.

• Proposed final dividend: 6.4 HK cents per share, payout ratio 108.5%.

Outlook and guidance

• Targeting 3-5% positive full-year growth for core business in 2026, with profit growth outpacing revenue.

• Focus on revitalizing brand portfolio, accelerating digital/omni-channel, and winning in Greater China.

• 2026 will see relaunches of Giordano Ladies and the core brand, with new store formats and digital platforms.

• Ambition to achieve high single to low double-digit CAGR in net sales by 2030.

• Management remains cautious about geopolitical risks, especially in the Middle East.