Sa Sa International (178) H2 24/25 earnings summary

Executive summary

• Turnover declined 9.7% year-over-year to HK$3,941M, mainly due to outbound travel and cautious tourist spending amid a strong US dollar.

• Gross profit margin sustained at 39.8%, down 1.0 ppt year-over-year.

• Recurring profit (excluding one-off China store closure costs) was HK$107M, down 51.1% year-over-year.

• Board proposed a final dividend of 1.7 HK cents per share; total annual dividend 2.45 HK cents, about 70% of core profit.

• All physical stores in Mainland China to be closed by June 2025, shifting focus to online business.

Financial highlights

• Gross profit fell 11.9% year-over-year to HK$1,571M.

• Net income attributable to owners was HK$77M, down 64.8% year-over-year.

• Basic EPS was 2.5 HK cents, down from 7.1 HK cents year-over-year.

• Cash and cash equivalents at year-end were HK$371M; working capital of HK$465.3M.

• Operating profit dropped to HK$106.3M from HK$285.1M year-over-year.

Outlook and guidance

• Strategy focuses on curated product portfolio, omni-channel integration, digital upgrades, and enhanced product display to drive sales and gross profit growth while maintaining stable margins.

• FY2025/26 Q1 sales (up to 15 June) rose 4.5% year-over-year, with HK & Macau up 9.5% and Southeast Asia up 12.5%.

• Group expects to maintain a sustainable and steady dividend policy.

• Mainland China offline sales to be discontinued, with focus shifting to online and cross-border e-commerce.