Chow Tai Fook Jewellery Delivers Growth in Same Store Sales and Retail Sales Value in First Quarter FY2024
10 Jul 2023

Chow Tai Fook Jewellery Group Limited (“Chow Tai Fook Jewellery Group”, the “Group” or the “Company”; SEHK stock code: 1929), today announces unaudited key operational data of the Group for the three months ended 30 June 2023 (the “First Quarter”, or the “Quarter” or “1QFY2024”).

SSS and RSV Improvements Supported by Increased Mobility and Retail Activity

During 1QFY2024, recovery in general mobility and retail activity in the Mainland and Hong Kong and Macau had a positive impact on the Group’s business. Same Store Sales (“SSS”) in the Mainland recorded positive growth of 8.5%. With the reopening of Mainland’s border, SSS in Hong Kong and Macau increased notably by 64.2% during the Quarter, with Hong Kong showing an increase of 64.9% and Macau up by 62.1%.

Correspondingly, the Group’s RSV achieved a growth of 29.4% during the Quarter. Mainland RSV increased 25.2%, while that of Hong Kong and Macau rose 64.0% during the Quarter, reaching approximately 76% of the corresponding FY2019 levels.

Resilient Demand for Gold Products Presents Growth Opportunities

Demand for gold jewellery and products remained resilient in the First Quarter. This was an outcome of three ongoing developments as the Group constantly prospects for new growth opportunities which emerge with evolving market dynamics. Firstly, there is a higher propensity to spend and preference towards gold products in lower tier cities, where the Group has been deepening its penetration into. Secondly, there is a heightened appreciation for culture and aesthetics among younger customers, playing to the Group’s strengths in Chinese craftmanship and heritage. Lastly, given the market uncertainty, an overall shift in consumer spending and mindset towards luxury products has been observed, resulting in a positive impact on gold products.

In the Mainland, SSS of the gold jewellery and products was up by 9.9% during the Quarter. Its ASP was resilient at HK$5,500 (1QFY2023: HK$5,300). In Hong Kong and Macau, SSS of the product category doubled and its ASP ascended to HK$8,300 (1QFY2023: HK$6,100).

Attractive Value Proposition with Exquisite Gem-Set Offering, Uplifting RSV and ASP

In the Mainland, SSS of gem-set, platinum and k-gold jewellery category declined 4.1%, while its RSV grew by 8.0% during the Quarter. SSS of the product category in Hong Kong and Macau increased by 16.9% during the Quarter, driven by healthy volume and price increase. In the Mainland, the Same Store ASP of gem-set jewellery was benefitted from increased sales of higher ticketsize jewellery during the Quarter. In the Mainland, ASP was lifted to HK$8,000 (1QFY2023: HK$6,900), while that of Hong Kong and Macau was HK$16,700 (1QFY2023: HK$16,600).

Targeted Brand Positioning and Strengthened Product Differentiation

The Group continued to strengthen its product differentiation and optimise product portfolio. With an expanded gold offering portfolio, the Group is able to cater for different consumer segments, effectively capturing the emerging growth opportunities and trends. In addition to the successful HUÁ Collection, the Group also has the ING Collection and Liu Jin Sui Yue (“流金歲月”) Collection, which were well received by the younger customers.

During the Quarter, HEARTS ON FIRE, the internationally renowned jewellery brand known for the unparalleled sparkle of its signature cut diamonds, announced the global launch of its new VELA Collection. The VELA Collection reinforces HEARTS ON FIRE’s diamond expertise and craftsmanship with renewed focus on modernity and creativity, positioning HEARTS ON FIRE jewellery as a celebration of love in all its forms.

Driving Omni-Channel Growth with Centralised Marketing Strategy  

As part of elevating the Group’s brand positioning to increase brand desirability and build revenue resiliency, the Group centralised its marketing strategy to improve consistency and maximise impact and synergy across all channels.  The Group bolstered its marketing efforts during Mother’s Day and 520 Chinese Valentine’s Day period, aimed at offering customers an enhanced omni-channel experience while celebrating special occasions.

During the 618 Shopping Festival this year, the Group also strengthened the digital marketing initiatives and amplified the impact with livestreaming and short videos to drive sales. The Group emerged top place on the jeweller rankings on key online platforms. Compared to the same period last year, overall gross merchandise value during the festival grew by low teens.  

Committed to Sustainable Stakeholder Value Creation in A Year of Recovery and Normality

Notwithstanding the ongoing macro headwinds and market uncertainty which are beyond the Company’s control, the Group will stay focused on enhancing operational efficiency and resiliency. This complements the Group’s growth trajectory, building on the verticals of targeted brand positioning and product optimisation. To that end, the Group will be launching new designs for the HUÁ Collection together with its global campaign launch in mid July 2023. 

The Group continues to monitor the fluid market conditions closely and adopt a flexible approach with expansion plans. It stays prepared at all times with the ability to recalibrate its network and resources to capture growth opportunities as they emerge.

Building on the positive traction observed with the five strategic priorities, the Group is fully committed to strengthening its competitiveness, enhance the quality of its earnings and drive sustainable long-term stakeholder value creation.