Esprit issues profit warning as losses mount

Fashion chain Esprit warned on Thursday that it would make a loss of up to 2.27bn Hong Kong dollars ($289m) in the year to 30 June 2018 as a result of a mix of impairments.

The group expects to end the year with a loss before interest and taxation in the range of approximately 2.170bn and 2.27bn Hong Kong dollars, compared to a loss of 102 million Hong Kong dollars in the same period last year.

The company’s half-year report had already showed a decline for the full year, but the profit warning has shocked investors as it means the loss was unexpected. Among the reasons, the company cited a “significant” decline in China, which contributed to the loss of 794 million Hong Kong dollars.

Meanwhile, the closure of the group’s stores in Australia and New Zealand, announced in May 2018, will result in one-off costs in the range of 180 million and 200 million Hong Kong dollars.

The store closure programme impacted sales and will result in provisions of up to 185 million HK dollars, said the company in a report.

Esprit’s full-year results for the year ending 30 June 2018 will be released in September.

Esprit issues profit warning as losses mount

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