Giordano International (709) H2 2025 earnings summary

Executive summary

• Revenue decreased by 1.7% year-over-year, mainly due to underperformance of non-core brands in Indonesia, while core business revenue remained stable.

• E-commerce sales grew 10% YOY, with Mainland China up 9.1% and Southeast Asia/Australia up 45% (excluding Indonesia).

• Net profit attributable to shareholders rose slightly to HK$217 million, with EPS flat at 13.4 HK cents.

• The first year of the "Beyond Boundaries" five-year plan focused on building capabilities for future growth.

Financial highlights

• Gross profit margin declined by 1.2 percentage points YOY, but improved by 0.6 points in H2; excluding Indonesia, the decline was only 0.8 points.

• Operating profit fell 17% YOY to HK$313 million, with operating margin at 8.1%.

• Operating expenses increased 2.3% YOY, mainly due to higher digital marketing spend.

• Cash and bank balances, net of bank loans, stood at HK$698 million, down from HK$810 million.

• Inventory at year-end was HK$556 million, with turnover days rising to 119.

• Final dividend proposed at 6.4 HK cents per share, total payout ratio at 108.5%.

Outlook and guidance

• Focus remains on revitalizing the brand portfolio, accelerating digital transformation, and winning in Greater China.

• 2026 will see the relaunch of Giordano Ladies and the core Giordano brand, with new store formats and digital platforms.

• Management is cautious about geopolitical risks, especially in the Middle East, but remains committed to long-term growth.