Luk Fook Holdings (International) (0590) H1 2026 earnings summary

Executive summary

• Revenue increased 25.6% year-over-year to HK$6,843M, driven by strong fixed-price jewellery sales and product differentiation strategies.

• Operating profit rose 45.4% to HK$780M, and profit attributable to equity holders grew 42.5% to HK$619M.

• Basic EPS increased 41.9% to HK$1.05; interim dividend proposed at HK$0.55 per share, payout ratio 52%.

• Global shop count decreased by 174 to 3,113, reflecting network optimization, but overseas expansion continued, including entry into Vietnam.

• Same store sales in all markets recorded double-digit growth from October to November 2025.

Financial highlights

• Gross margin reached a record 34.7%, up 2.0 percentage points year-over-year.

• Gross profit increased by 33.2% to HK$2,373M.

• EBITDA rose 29.9% to HK$1,087M; adjusted EBITDA up 38.4% to HK$880M.

• Inventory increased 14.2% to HK$12,268M; average inventory turnover days at 490.

• Net borrowings increased to HK$1.1B, with debt-to-equity ratio at 37.0%.

Outlook and guidance

• Double-digit same store sales growth expected to continue in all markets; Mainland market shows marked improvement.

• Gross margin in the second half likely to remain at record highs due to VAT policy changes and inventory cost advantages.

• Strategic focus on overseas expansion, market-oriented products, and operational efficiency; plan to add 20 overseas shops in FY2026 and 50 over three years.

• Net reduction of around 200 shops in mainland China expected for the full year, with fewer closures in the second half.

• Cautiously optimistic on medium- and long-term prospects in Mainland and overseas markets.