Luk Fook’s March quarter sales jump 30% on gold rally at that time

Jeweler Luk Fook Holdings (International) Ltd. (0590.HK) on Thursday reported its overall retail sales value rose 32% year-over-year in the quarter through March 31 this year. Its retailing revenue, excluding franchised shops, jumped 43%, while same-store sales climbed 39% during the period.

Fueled by a sharp surge in gold prices earlier this year, gold and platinum products accounted for 82% of Luk Fook’s total retail sales value, marking a year-over-year increase of 6 percentage points.

The company’s total number of shops decreased by 148 in the first quarter of this year. Its global network stood at 2,857 stores at the end of June, including 157 self-operated Lukfook Jewellery locations. Meanwhile, it opened two new overseas branches, located in Singapore and Vietnam.

The company said that while gold prices have been volatile recently, consumers have gradually adapted to higher prices, preventing any significant impact on sales. Following the implementation of China’s new value-added tax policy on gold, the product price gap between the Mainland and Hong Kong and Macao has widened. This is expected to draw more consumers to purchase gold jewelry in Hong Kong and Macao, bolstering retail sales in those cities.

Shares of Luk Fook opened flat at HK$23 on Friday. The stock is down over 30% from its 52-week high.

By Lau Chi Hang

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