Profit for Hong Kong-based retailer Gome Electrical Appliances Holding is expected to fall for the nine months ended September 30, but the group says its third-quarter profit is expected to be “significantly” higher than that of the second quarter.
The company says the decrease is a result of its strategic transformation plan being implemented. Proposed last year, the “Omni-Channel, New Scenario, Strong Linkage” strategic plan was introduced this year.
Based on a preliminary review of the latest management accounts – including data of Artway Development and its subsidiaries from April 1 – the group’s total gross merchandise volume (GMV) for both online and offline is expected to grow by more than 20 per cent compared with the corresponding period last year. The GMV of the eCommerce business is expected to grow by more than 100 per cent.
Sales revenue for the period is expected to grow by about 14 to 15 per cent, with revenue from the B2C sector of the eCommerce business expected to grow by more than 75 per cent. Sales revenue from offline stores is expected to grow by about 8 to 9 per cent compared with the corresponding period last year.
As some of the group’s major stores were under renovation in the first half of the year, sales revenue from comparable stores is expected to decrease by about 10 per cent.
With the high-speed growth of the eCommerce business and the transformation of stores in the first-tier market, the consolidated gross profit margin is expected to be at the level of about 16 to 16.5 per cent.
Taking these factors into account, says the group, the profit attributable to the owners of the parent is expected to drop by about 70 to 80 per cent on the figures for the same period last year. It is expected the group’s results will improve once the strategic transformation is complete.
Regarding the acquisition of Artway Development, as all conditions have been fulfilled, the financial information of Artway has been consolidated to the group starting from April.
Audited information for the period under review is expected to be published by the end of next month.
