Chow Tai Fook, based in Hong Kong, experienced a 21% year-on-year drop in retail sales for the second fiscal quarter, largely due to high gold prices deterring customers. Reduced tourism and lower local spending during summer vacations also impacted sales, while lower consumer interest during China’s Golden Week added to the decline.
Retail sales in Hong Kong and other non-mainland markets, which represent 12% of total revenue, fell 31%. Mainland China, accounting for 88%, saw a 19% drop. Same-store sales decreased 31% in Hong Kong and Macau, with Hong Kong down 28% and Macau 40%.
“Record gold prices weighed on consumer sentiment,” Chow Tai Fook stated, noting the market in Hong Kong and Macau was further affected by changing tourist spending patterns. Despite these challenges, the company reported improved gem-set jewelry sales on the mainland during the holiday season, which helped mitigate some declines. Mainland same-store sales fell 24%, with gold product sales down 25% and gem-set jewelry down 28%. Hong Kong and Macau saw a 36% drop in gold products and a 17% decline in gem-set jewelry.