Belle warns of lower prospect for 2012 profit
Footwear firm's shares take a beating after it flags likelihood of just minor rise in results
Shares of Belle International, the largest mainland footwear retailer, were hammered yesterday after the firm said it expected last year's profit to come in at the lower end of market estimates.
The stock price fell 18.2 per cent, the biggest intraday loss since the firm's listing in May 2007, before closing at HK$15.28, down 16.8 per cent. Its rival, Daphne International, dropped 6.4 per cent.
The company said in a filing on Wednesday that the net profit for the year "will be marginally higher" than that of the previous year and "fall within the lower end" of analysts' estimates.
Analysts had forecast that Belle would record a net profit of between 4.29 billion yuan (HK$5.33 billion) and 4.85 billion yuan, compared with 4.26 billion yuan a year earlier.
Spencer Leung, an analyst with UBS Investment Research, said: "The pre-announcement of the weak results came as a negative surprise to the market. We expect sales to further decelerate and negative same-store sales to emerge in 2013."
Leung said Belle recently offered discounts of 55 per cent on winter products in department stores, reflecting rising inventory levels in sales channels.
However, in a research note, Guotai Junan International said it expected Belle's same-store sales to improve in the first half of this year thanks to the economic recovery and stronger consumer demand.
It said Belle, as the major mainland distributor of top brands like Nike and Adidas, might also benefit from mild sales growth in the sportswear sector this year.
Belle, which directly operates over 17,000 points of sale on the mainland, said last month that same-store sales for its footwear business grew 3 per cent for the three months to December 31.
