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China: zuoan fashion q2 rises on higher sales volume

China: zuoan fashion q2 rises on higher sales volume Source:
Date: 14-09-2013
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Chinese casual men's wear retailer Zuoan Fashion has booked a 2.2% rise in second quarter profit, helped by higher sales volume and lower selling and distribution costs.

The company, which operates 1,383 stores, said distributor sales increased by 15.3% to CNY312.8m, while self-operated direct store sales jumped 46.9% to CNY4.7m.

Founder, chairman and CEO James Hong said: "We are pleased to announce a healthy second quarter 2013, as our bottom line results exceeded our previous guidance.

"Our revenue increased from the previous quarter despite a noticeable drop in average selling prices thanks to the strong growth in sales through our distributors and direct stores. Selling and distribution costs were further reduced, as we continued our store model transition to improve our operational efficiency and infrastructure."

During the first half, meanwhile, net income grew 5.6% to $613.8m from $581.5m in the same period of last year. Revenues reached $141.4m, up 5.9% from $133.6m in the prior year.

"In the back half of the year, we expect to experience more challenging market conditions due to a cancellation of orders by certain distributors, a 3% decrease in wholesale prices offered to our distributors and increased advertising costs as we ramp up marketing efforts to capture greater market share.

"In spite of these near-term challenges, we remain comfortable with our ability to strengthen our brand presence and grow our profits over the long-term," Hong added.

For the third quarter, the company expects earnings per share to be CNY0.28-0.31 and revenues are forecast to be CNY370-390m.
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