Esprit issues profit warning, hit by a mixture of problems

By

Sandra Halliday

Published
Mar 20, 2023

Esprit Holdings has issued a profit warning for the 2022 financial year, announcing to the Hong Kong Stock exchange that it will make a loss for the year compared to the profit of a year earlier.

The company said that “based on the preliminary review of the unaudited consolidated management accounts of the group for the year ended 31 December 2022, [it’s] expected to record a loss attributable to the shareholders of the company of no more than HK$700 million”. That would work out at €83 million, £73 million and US$89 million at current exchange rates.

In the previous year the company had made a profit of HK$381 million.

The loss comes as final revenue is expected to be HK$7.063 billion for the year, compared to HK$8.316 billion in the previous period, a fall of 15.1%. 

Revenue fell for a variety of reasons, the company said. They included: global high inflation, which led to rising interest rates; high energy prices and high logistics costs; and the conflict in Ukraine. 

Combined, these issues “severely damaged consumer confidence and dampened consumer spending appetite particularly in Europe where the group primarily operates”.

The company also said that this led to gross profit for the group dropping to HK$2.878 billion from HK$4.042 billion a year earlier.

The final results should be published later this week.