Parkson Retail Group, the mainland's largest department store operator, said it would keep using promotions to increase market share after delivering a 14.9 per cent increase in net profit for the first quarter.
The department store chain, controlled by Malaysia's Lion Group, said it would strike a balance between increasing market share and maintaining operating margin, easing the concern by some analysts that heavy promotions would squeeze margins.
Parkson reported net profit rose to 258.68 million yuan (HK$293.83 million) from 225.16 million yuan a year earlier, thanks to better sales and effective control over staff costs.
Revenue increased 10.8 per cent to 946.48 million yuan from 853.85 million yuan while staff costs fell 7.2 per cent to 72.5 million yuan from 78.12 million yuan.
Parkson said in its filing to the Hong Kong stock exchange that as a result of aggressive sales and promotional strategies, the gross margin for merchandise sales declined to 18.1 per cent from 19.4 per cent in the first quarter of last year.
Concessionaire rates came in at 18.3 per cent in the first quarter, against 19.9 per cent last year.