Esprit Holdings (0330.HK) posted a 21% drop in profit in the six months ended December, largely due to declining sales in Europe and despite a 5.4% sales growth in China, Bloomberg reported. Net income declined to HK$2.14 billion (US$275 million), missing analyst estimates, from HK$2.7 billion a year earlier. Wholesale revenue slid 13%. China sales contributed HK$1.4 billion to the bottom line, but the China market could not offset weak demand in Europe. While the China market is contributing more than the European market, Esprit’s performance in China is still relatively weak. Same-store sales growth in China is just 0.5%. Esprit shares fell 0.3% in Hong Kong following the announcement. The stock has lost 32% over the last 12 months. Esprit competes with Hennes & Mauritz (H&M; HMB.OMX) and Inditex’s (IDX.MCE) Zara in both China and Europe.
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