Esprit warns of a drop in sales and profits

The clothing supplier Esprit Holdings Limited, which has been in crisis for a long time, recently showed an upward trend after drastic reforms. On Monday, however, the company had to warn of a significant drop in sales and earnings in the first half of the current 2022 financial year in a mandatory notification. The main reason given by Esprit was unfavorable exchange rate developments.

According to preliminary figures, sales in the months from January to June amounted to just under 3.63 billion Hong Kong dollars (465 million euros). It was thus about six percent below the corresponding level of the previous year. The decline was “essentially due to the depreciation of the euro against the Hong Kong dollar,” said the company, which generates most of its revenue in Europe. Adjusted for currency effects, group sales increased by around two percent.

The weak euro weighed on the results

The reported decline in sales also weighed on the result. Based on the results available, Esprit now expects net income attributable to shareholders of HK$13 million (EUR1.67 million). In the same period of the previous year, the clothing supplier had achieved a corresponding surplus of around 121 million Hong Kong dollars.

The group announced that it intends to continue its reform course in the coming months: “For the remainder of the year, the group will continue to focus on initiatives to increase sales, increase operational efficiency and improve inventories and receivables management,” says one Message. The clothing supplier wants to “devote special attention to the “decreasing effects of the pandemic” and optimize the cost structure”. The aim is to “improve the company’s overall performance,” explained Esprit.

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