DAPHNE INTERNATIONAL HOLDINGS LIMITED Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
(Incorporated in the Cayman Islands with limited liability) (Stock code: 210)
The board of directors (the "Board") of Daphne International Holdings Limited (the "Company", together with its subsidiaries collectively referred to as the "Group") announces the unaudited operational data and information of the Group's Core Brands business for the fourth quarter ended 31 December 2015, and a profit warning of the Group for the financial year ended 31 December 2015. This announcement is made pursuant to Rule 13.09 of the Rules Governing the Listing of Securities (the "Listing Rules") on The Stock Exchange of Hong Kong Limited and Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).
The unaudited operational data and information of the Group's Core Brands business for the fourth quarter ended 31 December 2015 is as follows:
For the fourth quarter of 2015 | For the full year of 2015 | |
Same store sales growth rate ("SSSG") (YoY % change) | -20.2% | -18.5% |
Net addition/ reduction of points-of-sale ("POS") | -405 (reduced 384 directly-managed stores and 21 franchised stores) | -805 (reduced 692 directly-managed stores and 113 franchised stores) |
As at 31 Dec 2015 | |
Total number of POS | 5,597 |
Note: Core Brands business refers to the operation of "Daphne" and "Shoebox" brands in Mainland China
For the fourth quarter of 2015, the same store sales of the Group's Core Brands business recorded a year-on-year decline of 20.2%. As a result, the same store sales growth of the Core Brands for the full year of 2015 is -18.5%.
The sales during the period were mainly affected by:
Soft consumer sentiment along with weakening economy in China
Unusually warm winter
Dilution of store traffic from the Single's Day online promotions in November
More competitive retail environment resulted from earlier launch of deep discounts by peers
* for identification purpose only
The average selling price recorded a single-digit drop during the period. Moreover, the gross profit margin was under pressure. The benefits from increasing store closures were yet to be reflected in the operating margin. Therefore, the operating margin saw a further drag.
The Group continued the rationalization of its store network, with net closures of 405 POS during the fourth quarter (with a reduction of 384 directly-managed stores and 21 franchised stores). During the financial year of 2015, the Group recorded net closures of 805 stores, including 692 directly-managed stores and 113 franchised stores, and concluded the year with a total number of 5,597 POS (5,056 directly-managed stores and 541 franchised stores) as at 31 December 2015.
Daphne continued to rank top in the ladies' footwear segment for Alibaba's "Single's Day" online shopping event. This reflected Daphne's strong brand equity in China. The Group's e-commerce business unit achieved sales growth in the fourth quarter, as well as for the year ended 31 December 2015. However, the contribution of its online business to the Group's turnover was still small, therefore its e-commerce sales growth could not offset the impact from the dilution of store traffic during the year under review.
The Board wishes to inform the shareholders and potential investors of the Company that, based on preliminary review of the unaudited consolidated management accounts of the Group and the information currently available, the Group expects to record a material loss attributable to equity holders of the Company for the year ended 31 December 2015. Such loss is mainly attributable to
(i) significant drops in both sales and gross profit; (ii) increased negative operational leverage; and
(iii) certain operational charges related to, among others, inventory, personnel and store rationalization.
The Board wishes to remind the shareholders and potential investors of the Company that as the Company is still in the process of finalizing its results for the year ended 31 December 2015, the information contained in this announcement is only based on the preliminary assessment made by the Board with reference to the information currently available. Such information has not been reviewed or audited by the independent auditors of the Group. The announcement of annual results of the Group for the year ended 31 December 2015 is expected to be published in late March 2016.
By Order of the Board
Daphne International Holdings Limited Chen Ying-ChiehChairman
Hong Kong, 26 January 2016
As at the date of this announcement, the Board comprises Mr. Chen Ying-Chieh, Mr. Chang Chih-Chiao, Mr. Chang Chih-Kai and Mr. Chen Tommy Yi-Hsun being the executive directors; Mr. Huang Shun-Tsai, Mr. Kuo Jung-Cheng and Mr. Lee Ted Tak Tai being the independent non-executive directors.
Daphne International Holdings Limited issued this content on 26 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 26 January 2016 11:24:05 UTC
Original Document: http://www.daphneholdings.com/wp-content/uploads/2012/09/E-Operational-info-2015Q4.pdf
