Esprit posts 20pc rise in revenue on robust sales in Europe

Esprit Holdings, a Hong Kong-based global fashion wholesale and retailing chain, said sales rose 20 per cent in the first quarter of this fiscal year, driven by revenue growth in Europe.

The blue chip, whose shares have risen 44.9 per cent so far this year, said the sales increase for the three months to September was fuelled by a 13 per cent expansion in wholesale revenue from a year earlier and 15 per cent same-store sales growth.

Operating profit margin remained steady at 20 per cent. The company did not give the actual sales figure for the first quarter.

Esprit, which derives 87 per cent of its sales from Europe, was helped by the 2.8 per cent economic growth in Britain in the quarter to September, the fastest in two years. It also brushed off slowdown in the euro-zone economies such as Germany and France.

Phoebe Wong, an analyst at Nomura International (HK), said in a research report yesterday that Esprit's first-quarter results were better than expected because they came from a low base, compared with a year earlier when growth came from a high base.

Esprit suffered from a sales slump in the quarter to December last year because of merchandise problems leading to severe discounts. The first-quarter results 'give us comfort the group is less likely to lose ground again in the medium term', wrote Ms Wong, who expects retail to be Esprit's growth engine.