Sa Sa profit drop looms

Sa Sa profit is expected to fall 35 to 45 per cent for the six months ended September 30.

The Hong Kong-based cosmetics retailer has issued a profit warning, citing a drop in both sales and gross profit margin of its Hong Kong and Macau business, weaknesses in some overseas stores and decline in online profits.

Meanwhile, the group has recorded a 2.3 per cent decrease in retail and wholesale turnover to HK$1910.9 million (US$246.3 million) for its second quarter.

In other markets, including China, Malaysia, Singapore, Taiwan and Sasa.com), the group’s turnover fell 2.9 per cent. For Hong Kong and Macau, turnover was down 2.2 per cent to HK$1552 million, total sales easing by 2 per cent while same-store sales were 2.5 per cent down on a year-on-year basis.

However, there was a 3.9 per cent rise in the number of transactions because of increased traffic growth. The number of transactions of Hong Kong and mainland customers rose by increased by 1.8 and 5.9 per cent respectively, while the average sales per transaction fell by 5.5 and 6.9 per cent respectively.

Improved sales performances, says the group, were a result of its efforts to adjust product offerings to meet market demand. The resulting change in product mix intensified downward pressure on gross profit margin for the quarter.

For the National Day Golden Week holiday from October 1 to 7, the group’s retail sales in Hong Kong and Macau had positive growth of 13.8 per cent, with same-store sales growing by 12.4 per cent.

As at September 30, the group had a total 283 stores/counters, down from 288 at June 30. Hong Kong and Macau has 113 outlets (up one), China 53 (down two), Malaysia 68 (down one), Taiwan 26 (down five). Singapore was steady at 23 outlets.