June 25, 2015 / 5:40 AM / 3 years ago

Cosmetics chain Sa Sa says full-year net profit down 10 pct

HONG KONG, June 25 (Reuters) - Hong Kong skin care and cosmetics retailer Sa Sa International Holdings Ltd said on Thursday its full-year net profit fell 10.3 percent as the weaker purchasing power of mainland Chinese shoppers and a stronger currency hit consumer sentiment.

“We expect the pace of mainland China tourist arrivals will continue to slow and that local consumption sentiment will remain weak,” Chairman and Chief Executive Simon Kwok said about the outlook for next year in a filing to the Hong Kong bourse.

“A strong Hong Kong dollar will continue to make shopping overseas more attractive for mainland Chinese and local consumers, while price competition will add pressure to a slower market,” Kwok said.

Sa Sa’s net profit fell to HK$838.8 million ($108.21 million) for the year ended March 31, from HK$935.2 million in the year ago period. That compared to an average net profit forecast of HK$825.2 million in a Reuters poll.

Revenue increased 2.7 percent to HK$8.76 billion. Its retail network expanded to 287 stores from 280 a year ago.

The political situation in Hong Kong, and the faster pace of change in consumer preferences may add to uncertainties in the already slow retail market, Kwok said.

Shares of Sa Sa slid 0.7 percent prior to the results announcement, lagging a 0.3 percent fall in the benchmark Hang Seng index. Smaller rival Bonjour Holdings was up 1.8 percent.

$1 = 7.7514 Hong Kong dollars Reporting by Donny Kwok; Editing by Biju Dwarakanath

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