Daphne'S Shareholders Accounted For HK $994 Million Loss In 2018

Daphne International announced its 2018 results.

By the end of December 31, 2018, Daphne's international sales volume was HK $4 billion 127 million, down 20.8% compared to the same period last year, and the share loss of shareholders was about HK $994 million, up 35.4% over the same period last year. The basic and diluted loss per share was 60.3 cents and no dividend.

The announcement shows that the operating loss in 2018 was HK $787 million, compared with the previous year's operating loss of HK $689 million.

In 2018, the loss attributable to shareholders of the company was HK $994 million, compared with HK $734 million in 2017.

Due to the increase in the proportion of over the past inventory in the sales mix, the gross profit margin of the group decreased to HK $2 billion 61 million, and the gross profit margin dropped to 49.9%.

The announcement said that the adverse economic environment to combat consumer desire, so that Daphne group turnover fell 20.8% to 4 billion 127 million 100 thousand yuan.

The decrease in turnover was mainly due to a decrease of 26.2% to 2648 stores in its core brand business, and a 7.6% year-on-year sales in the same store, which led to a decline in its sales.

As the sales network narrowed and the same store sales fell, the core brand business turnover fell 19.2% to HK $3 billion 799 million, and the core brand business accounted for 86% of the group's total revenue.

The gross profit margin of core brand business decreased by 4 percentage point to 45.2% in 2018, and the average selling price dropped to 155 yuan.

The turnover of other brand businesses decreased by about 20.6% to HK $582 million 500 thousand, mainly due to the challenging retail market environment and a net decrease of 30.4%, or 75 sales points, in the past year.

Other brand business segments accounted for about 14% of the group's total turnover in 2018.

As a result, the proportion of active inventory clearing and electricity business sales increased, compared with the previous year.

The gross interest rate of other brand businesses fell 3.8 percentage points to 54.4%, plus negative operating leverage, which led to a loss of HK $26 million 700 thousand in other brand business operations.

Daphne international closed 1016 sales outlets in the year of review. In December 31, 2018, the group had a total sales point of 2820, including 2648 sales outlets of core brand business and 172 sales outlets of other brand businesses.

Its core brand business closed 941 sales outlets (including 899 Direct stores and 42 franchised stores), a decrease of 26.2% compared with December 31, 2017.

In response to the difficult business environment faced by entity retailers, Daphne international continues to adjust its channel mix to close poorly performing shops.

On the other hand, the group also tries to increase its market penetration through the sales channels of more fashionable shopping centers, so as to adapt to the fast changing consumption patterns and consumer preferences.

The source of chart data is Daphne International's annual results announcement for the year ended December 31, 2018.