Esprit shares up as sales improve, divestment plan completed
Gisele Bundchen for Esprit / Photo: Esprit
The Europe-focused clothing retailer climbed to HK$15.20, the highest since May 4. The stock was up 6.6 percent at HK$14.94 as of the midday break, outpacing a 0.93 percent decline in the benchmark index .HSI.
The company's retail store sales improved in the third quarter ended March, expanding 0.5 percent year-on-year, thanks to growth in Europe, according to Bank of America Merrill Lynch. Sales declined in the fiscal first half.
Esprit competes with Swedish clothing retailer Hennes & Mauritz AB and Spain's Inditex SA in Europe.
The Hong Kong-based retailer shut all its stores in North America as of the end of March, resulting in a net write-back of HK$700 million ($90.17 million) due to favorable settlements with landlords and employees, the fashion group said late Wednesday.
Esprit, which admitted last year that its brand had "lost its soul," in April hired Thomas Tang, former chief financial officer of blue chip developer Sino Land Co Ltd, as group chief financial officer.
"We continue to believe it is too early to get positive on Esprit, with its transformation plan still at an early stage," Alice Hui, an analyst at DBS Group Research, wrote in a note.
Analysts said a weaker euro will also have a negative impact on earnings in the second half.
© Thomson Reuters 2013 All rights reserved.