BRIEF: Pagoda forecasts up to $54.8 million loss last year
Fruit retailer Shenzhen Pagoda Industrial Group Co. Ltd. (2411.HK) warned on Monday that it lost between 350 million yuan ($48.6 million) and 400 million yuan last year, reversing a profit of 362 million yuan in 2023. It added its revenue declined by up to 15% from 11.39 billion yuan in 2023.
Pagoda attributed the shift into the red partly to weak consumer spending in China. In the second half of last year, the company adjusted its mix to meet consumer demand for cheaper products, lowering its gross margin in the process. The company also implemented its new “Expert and Leader in the High-Quality Fruit Industry” program, which included store renovations, marketing campaigns, and the appointment of a lifestyle ambassador, leading to increased expenses.
Furthermore, Pagoda encouraged franchisees to relocate from high-rent locations to lower-rent ones, reducing the number of franchised stores from 6,081 at the end of 2023 to 5,116 by the end of 2024.
Pagoda’s stock opened 1.64% lower on Tuesday at HK$1.20 and closed down 3.28% at HK$1.18 by midday break.
By Lee Shih Ta
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