Luk Fook Holdings' net profit in the six months to September 30 fell 3.2 per cent from a year earlier to HK$29.4 million.
The jewellery retailer's turnover dropped 4.3 per cent to HK$747.2 million.
Earnings per share slid to 6.45 HK cents from 6.67 HK cents in the period.
Chairman William Wong Wai-sheung attributed the earnings decline to a slow recovery in the sector, saying: '[Jewellery] is a weird business. People are still reluctant to purchase our products even though the economic situation is getting better.'
Mr Wong said Luk Fook would be aggressive in its expansion into China after accession to the World Trade Organisation.
'We hope the limitations on jewellery trade in China will loosen after it enters the WTO so that we can do business there,' he said.