Cafe de Coral warns of declining profit
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Cafe de Coral expects to report lower net profit for the six months ended September 30 due to a “severe and expected downturn” amid a weakened economy.
The restaurant chain forecasts net profit to decline not higher by 30 per cent from HK$200.6 million (US$25.8 million) in the year-ago period, due to the plunge in the restaurant business and a high-base effect following strong sales recovery when the pandemic-related restrictions were lifted.
In Hong Kong, the company focused on value offers, menu mix, hero product promotions, and membership loyalty strategies to create demand and help offset decline.
In Mainland China, the company implemented quick menu investments, promotional offers, and brand campaigns to keep a stable performance and profit margins.
“With the central government’s determined efforts to promote recovery of the economy, as well as our strong underlying business fundamentals and steady focus on constant internal improvement, the group is well positioned to return to growth as the market recovers,” said the company.
Questions & Answers
Q.What is the expected profit decline for Cafe de Coral?
What is the expected profit decline for Cafe de Coral?
Cafe de Coral expects its net profit to decline by up to 30 per cent for the six months ending September 30. This is compared to HK$200.6 million (US$25.8 million) in the same period last year.
Q.What factors are contributing to the decline in profit?
What factors are contributing to the decline in profit?
The decline is attributed to a severe and expected downturn due to a weakened economy and a plunge in the restaurant business. A high-base effect from strong sales recovery after pandemic restrictions also plays a role.
Q.How is Cafe de Coral addressing the downturn in Hong Kong?
How is Cafe de Coral addressing the downturn in Hong Kong?
In Hong Kong, the company is focusing on value offers, optimising its menu mix, promoting hero products, and using membership loyalty strategies. These efforts aim to create demand and help offset the decline.
Q.What strategies are being used in Mainland China?
What strategies are being used in Mainland China?
In Mainland China, Cafe de Coral has implemented quick menu investments, promotional offers, and brand campaigns. These actions are designed to maintain stable performance and profit margins in the region.