By Richard Woodard | 15 July 2013
Footwear retailer Daphne International Holdings has warned that first half profits would suffer a ?meaningful decline? following a 13.7% drop in second quarter same store sales.
Shares in the fast-expanding company, which operates the Daphne and Shoebox brands with more than 6,500 points of sale on the Chinese mainland, plunged 13% on Friday (12 July) following the announcement.
Daphne blamed the decline on weak consumer sentiment as economic growth slows, poor spring weather conditions and an avian flu outbreak in eastern China.
Trading in the crucial pre-Chinese New Year period was disappointing, the company added.
More discounting was needed to drive sales growth in the second quarter, which along with the aggressive clearance of off-season items impacted gross profit margin.
Daphne unveiled a business plan for the second half of the year, including targets to increase sales productivity, strengthen the product offering and supply chain management, and bolster the brand image alongside increased marketing efficiencies.
The company said: ?While the performance of the first half of 2013 is below expectation, the group looks to revive growth and improve performance in the second half of the year.?