Hong Kong-listed beauty retailer Sa Sa International Holdings has flagged a slump in profit for the fiscal year amid a decline in sales.

The board expects attributable profit of approximately HK$70-80 million (US$9-10 million) for the year ended March 31. This would represent a 63-68 per cent drop from the prior year’s profit of  HK$219 million.

The reduction is mainly due to an expected 10-11 per cent decrease in overall turnover, which includes a 11-12 per cent decline in Hong Kong and Macau – the group’s core market.

Headwinds in the market were listed as the ongoing trend of Hong Kong residents tripping north to Mainland China and abroad and changing habits of Mainland Chinese tourists (which is shifting from shopping-centric trips to experiential travel).

In the Mainland Chinese market, the group plans to close 18 physical stores after its online business became the main retail channel. Management believes that adopting an asset-light model will reduce operating costs and enhance economic efficiency.

Sa Sa has also announced its unaudited financial update for the fourth quarter, with sales falling 7.2 per cent year-on-year. This follows a 10.7 per cent reduction in the third quarter.

By region, sales dropped 3.6 per cent in Hong Kong and Macau and 40 per cent in Mainland China. Meanwhile, Southeast Asia recorded a 17 per cent improvement.

The group expects to publish its full-year results before June 30.