Lifestyle International sees profit plunge by half even as sales rise at its iconic Sogo stores in Hong Kong
- The flagship Sogo Causeway Bay store saw a 10.5 per cent growth in sales last year while the increase at the Tsim Sha Tsui branch was 30 per cent
Lifestyle International Holdings, the operator of Hong Kong’s popular Sogo department stores, saw its net profit plunge by a half last year even as sales and turnover grew.
Total proceeds from sales jumped 14 per cent to HK$11.7 billion (US$1.5 billion), while turnover grew 16 per cent to HK$4.36 billion (US$555 million), company said on Monday.
That was not enough to prevent net profit falling by almost 50 per cent to HK$1.69 billion (US$ 215 million), roughly in line with the HK$1.7 billion consensus estimate in a Refinitiv survey of 30 analysts.
Lifestyle International attributed the slump in profit this year mainly to losses sustained from investment income and lower revaluation gains from its investment properties. Profit in 2017 had been boosted by a one-off gain of HK$420.8 million from the disposal of a majority stake in a subsidiary.
“Hong Kong, the group’s home market, saw its economic growth slow in the second half of 2018 under the shadow of the US-China trade war dispute and slowing Chinese economy,” said Kam Shim Lau, the firm’s executive director.
