Chow Tai Fook stock plummets amid weak earnings

Chow Tai Fook Jewellery Group stocks fell the most in five months after the world’s largest listed jewelry chain reported earnings that missed analyst estimates.

The stock fell 6.5 percent to HK$8.58 at the close of trading in Hong Kong, the biggest decline since January, Bloomberg reported.

The group reported total revenue for the year of HK$64.28 billion ($8.29 billion), down 17 percent compared with the previous year's HK$77.41 billion. Net profit for the year was reported as HK$5.54 billion, down from HK$7.45 billion for FY2014, as sales weakened in China and major markets such as Hong Kong and Macau.

The company’s net income fell 25 percent to HK$5.46 billion ($704 million) for the year ended March. That missed the HK$5.9 billion average of 23 analyst estimates compiled by Bloomberg. “We are turning more concerned on the company’s outlook,” UBS Group AG analysts wrote in a note on Friday.

The company’s jewelry sales fell 16 percent in China and 33 percent in Hong Kong and Macau, as Chinese shoppers cut back on luxury spending amid a slowing economy and the government’s austerity campaign.

 

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