Luk Fook Holdings (International) expects weaker demand for jewellery from mainland consumers this year after strong net profit growth of 54 per cent for the last fiscal year.
'I am not so optimistic about jewellery sales in Hong Kong this year, considering the impact of the European debt crisis and the slowing global economy,' Luk Fook chief executive Wong Wai-sheung said.
The Hong Kong-based jewellery retailer recorded single-digit sales growth in January and February compared with 40 per cent in the same period last year, Wong said. He blamed the slow market on lower demand from mainland tourists and a high base last year.
Wong expects sales growth to stay at the same level for the whole year.
Luk Fook's net profit rose to HK$1.33 billion for the year to March from HK$866 million over the previous year. Revenue grew 47 per cent to HK$11.9 billion for the period.
Luk Fook's share price fell 4.6 per cent to HK$15.66 yesterday. The stock has lost up to 43 per cent this year while the Hang Seng Index has edged up 0.7 per cent. Rivals Chow Tai Fook and Chow Sang Sang have also shed 36 and 14 per cent, respectively, this year.
Analysts said the jewellery sector had cooled since the end of last year, in step with the decline in international gold prices and the global economic slowdown.
