佐丹奴国际(00709) - 2025 - 中期业绩

Unaudited Interim Results Announcement Overview H1 2025 Performance Summary The Group achieved 1.6% revenue growth in H1 2025, driven by strong online and wholesale business performance - The Group's H1 2025 revenue grew by 1.6%, primarily driven by the online business (26.1% growth) and wholesale operations[3][30] - Gross profit margin decreased by 3.3 percentage points to 55.6% due to channel mix shifts and strategic inventory clearance[3][30] - Operating expenses as a percentage of revenue decreased by 0.6 percentage points to 48.9%, reflecting disciplined cost management[3][30] Key Financial Indicators for H1 2025 | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,934 | 1,903 | 1.6% | | Gross Profit Margin | 55.6% | 58.9% | -3.3 p.p. | | Operating Expenses as % of Revenue | 48.9% | 49.5% | -0.6 p.p. | | Net Profit Attributable to Shareholders | 121 | 120 | 0.8% | | Inventory Balance | 513 | 514 | -0.2% | | Inventory Turnover Days | 108 days | 119 days | -11 days | | Cash and Bank Balances, Net of Bank Loans | 722 | 720 | 0.3% | | Basic Earnings Per Share (HK cents) | 7.5 | 7.4 | 1.4% | | Interim Dividend (HK cents per share) | 7.5 | 8.0 | -6.3% | Consolidated Financial Statements Consolidated Income Statement The Group's revenue grew 1.6% to HK$1,934 million, while operating profit declined 11.4% to HK$179 million Summary of Consolidated Income Statement (For the six months ended June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Revenue | 1,934 | 1,903 | | Cost of sales | (858) | (783) | | Gross profit | 1,076 | 1,120 | | Other income and other gains, net | 49 | 24 | | Distribution costs | (842) | (811) | | Administrative expenses | (104) | (131) | | Operating profit | 179 | 202 | | Finance costs | (23) | (22) | | Share of profit of a joint venture | – | 15 | | Profit before income tax | 156 | 195 | | Income tax | (23) | (53) | | Profit for the period after income tax | 133 | 142 | | Net profit attributable to shareholders of the Company | 121 | 120 | | Non-controlling interests | 12 | 22 | | Basic earnings per share (HK cents) | 7.5 | 7.4 | Consolidated Statement of Comprehensive Income Total comprehensive income for the period significantly increased to HK$193 million from HK$88 million year-over-year Summary of Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Profit for the period after income tax | 133 | 142 | | Exchange translation adjustments attributable to non-controlling interests of overseas subsidiaries | (1) | (5) | | Exchange translation adjustments of overseas subsidiaries, a joint venture and branches | 61 | (49) | | Total comprehensive income for the period | 193 | 88 | | Attributable to shareholders of the Company | 182 | 71 | | Non-controlling interests | 11 | 17 | Consolidated Balance Sheet Total assets slightly decreased to HK$3,723 million, while net current assets improved to HK$640 million Summary of Consolidated Balance Sheet (As at June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Assets | | | | Total current assets | 1,662 | 1,692 | | Total non-current assets | 2,061 | 2,074 | | Total assets | 3,723 | 3,766 | | Liabilities and Equity | | | | Total current liabilities | 1,022 | 1,134 | | Total non-current liabilities | 491 | 512 | | Total liabilities | 1,513 | 1,646 | | Equity attributable to shareholders of the Company | 2,083 | 1,998 | | Non-controlling interests | 127 | 122 | | Total equity | 2,210 | 2,120 | | Net current assets | 640 | 558 | Notes to Financial Statements Significant Accounting Policies The interim results are prepared in accordance with HKAS 34, with accounting policies consistent with the 2024 annual report - These interim results are prepared in accordance with the Listing Rules of the Hong Kong Stock Exchange and HKAS 34, with accounting policies largely consistent with the 2024 annual financial statements[7] - The adoption of revised standards this period (e.g, amendments to HKAS 21 and HKFRS 1) had no material impact on the Group's accounting policies or financial performance[10] - HKFRS 18, which will replace HKAS 1, is expected to have a broad impact on financial statement presentation and disclosure, with management currently assessing its detailed effects[11] Sales and Operating Segments The Group's operating segments are managed by geography and brand, with performance measured by adjusted EBITDA - The Group's main operating segments are retail and distribution, and wholesale to overseas franchisees, which management oversees by region and brand[12] Sales and Segment Results by Geography (For the six months ended June 30) | Region | 2025 Sales (HK$ million) | 2024 Sales (HK$ million) | 2025 Segment Results (HK$ million) | 2024 Segment Results (HK$ million) | | :--- | :--- | :--- | :--- | :--- | | Mainland China | 337 | 300 | (16) | (13) | | Hong Kong & Macau | 177 | 182 | 9 | 18 | | Taiwan | 203 | 206 | 15 | 18 | | Southeast Asia & Australia | 688 | 739 | 85 | 133 | | GCC | 368 | 362 | 73 | 76 | | Wholesale to overseas franchisees | 161 | 114 | 11 | 13 | | Total | 1,934 | 1,903 | 177 | 245 | Retail and Distribution Sales and Operating Profit by Brand (For the six months ended June 30) | Brand | 2025 Sales (HK$ million) | 2025 Operating Profit (HK$ million) | 2024 Sales (HK$ million) | 2024 Operating Profit (HK$ million) | | :--- | :--- | :--- | :--- | :--- | | Giordano and Giordano Junior | 1,525 | 161 | 1,502 | 201 | | Giordano Ladies | 122 | 14 | 122 | 18 | | BSX | 4 | – | 4 | – | | Others | 122 | (9) | 161 | 13 | | Total | 1,773 | 166 | 1,789 | 232 | Other Income and Gains Net other income and gains increased significantly to HK$49 million from HK$24 million, driven by higher exchange gains Other Income and Gains, Net (For the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Royalty and license income | 13 | 14 | | Interest income | 5 | 10 | | Rental and sub-letting income | 4 | 4 | | Net loss on disposal of property, plant and equipment | (1) | (1) | | Net foreign exchange gains (losses) | 11 | (7) | | Others | 17 | 4 | | Total | 49 | 24 | Composition of Operating Profit Operating profit is stated after charging cost of sales, distribution costs, and administrative expenses Items Deducted from / Credited to Operating Profit (For the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Cost of Sales | | | | Cost of inventories sold | 861 | 783 | | Net reversal of provision for and write-off of obsolete inventories | (3) | – | | Total Cost of Sales | 858 | 783 | | Distribution Costs | | | | Staff costs | 306 | 303 | | Depreciation (right-of-use assets) | 203 | 202 | | Depreciation (property, plant and equipment) | 29 | 27 | | Lease payments for land and buildings | 115 | 104 | | Advertising, promotion and incentives | 49 | 39 | | Total Distribution Costs | 842 | 811 | | Administrative Expenses | | | | Staff costs | 70 | 93 | | Depreciation (right-of-use assets) | 9 | 7 | | Depreciation (property, plant and equipment and investment properties) | 3 | 3 | | Legal and professional fees | 8 | 11 | | Total Administrative Expenses | 104 | 131 | Finance Costs Finance costs for the period were HK$23 million, a slight increase from HK$22 million in the prior year Finance Costs (For the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Interest on lease liabilities | 22 | 22 | | Interest on bank loans | 1 | – | | Total | 23 | 22 | Income Tax Income tax expense decreased significantly to HK$23 million from HK$53 million, due to provision reversals and deferred tax adjustments Income Tax (For the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Current Income Tax | | | | Hong Kong | 1 | 1 | | Outside Hong Kong | 26 | 34 | | Over-provision in prior periods | (7) | – | | Withholding tax | 10 | 18 | | Subtotal | 30 | 53 | | Deferred Income Tax | | | | Origination and reversal of temporary differences | (7) | – | | Total | 23 | 53 | Earnings Per Share Basic earnings per share for the period was 7.5 HK cents, a slight increase from 7.4 HK cents year-over-year Earnings Per Share (For the six months ended June 30) | Indicator | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | Basic earnings per share | 7.5 | 7.4 | | Diluted earnings per share | 7.5 | 7.4 | | Weighted average number of ordinary shares in issue (Basic) | 1,616,190,628 | 1,614,555,002 | | Weighted average number of ordinary shares in issue (Diluted) | 1,616,190,628 | 1,614,555,002 | | Weighted average number of shares issued upon exercise of share options | 1,453,313 | 8,911,412 | Dividends The Board declared an interim dividend of 7.5 HK cents per share, totaling approximately HK$121 million Dividends (For the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Interim dividend declared (HK cents per share) | 7.5 (121) | 8.0 (129) | | 2024 final dividend paid (HK cents per share) | 6.0 (97) | 13.5 (218) | Trade and Other Receivables Net trade receivables increased to HK$225 million, with a rise in balances aged over 90 days Trade and Other Receivables (As at June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Net trade receivables | 225 | 209 | | Other receivables, including deposits and prepayments | 157 | 133 | | Total | 382 | 342 | Aging Analysis of Trade Receivables (As at June 30) | Aging | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | 0 to 30 days | 185 | 142 | | 31 to 60 days | 14 | 48 | | 61 to 90 days | 4 | 13 | | Over 90 days | 22 | 6 | | Total | 225 | 209 | Trade and Other Payables Total trade and other payables decreased to HK$478 million from HK$611 million at year-end 2024 Trade and Other Payables (As at June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Trade payables | 215 | 292 | | Pension obligations | 40 | 36 | | Other payables and accrued charges | 223 | 283 | | Total | 478 | 611 | Aging Analysis of Trade Payables (As at June 30) | Aging | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | 0 to 30 days | 183 | 262 | | 31 to 60 days | 22 | 19 | | 61 to 90 days | 3 | 4 | | Over 90 days | 7 | 7 | | Total | 215 | 292 | Management Discussion and Analysis Operating Results Overview The Group's H1 2025 revenue grew 1.6%, while operating profit declined 11.4%, with significant improvement in inventory turnover Group Operating Results (For the six months ended June 30) | Indicator | 2025 (HK$ million) | % of Revenue | 2024 (HK$ million) | % of Revenue | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Group revenue | 1,934 | 100.0% | 1,903 | 100.0% | 1.6% | | Gross profit | 1,076 | 55.6% | 1,120 | 58.9% | (3.9%) | | Other income and other gains, net | 49 | 2.6% | 24 | 1.2% | 104.2% | | Operating expenses | (946) | (48.9%) | (942) | (49.5%) | 0.4% | | Operating profit | 179 | 9.3% | 202 | 10.6% | (11.4%) | | Profit after tax attributable to shareholders | 121 | 6.3% | 120 | 6.3% | 0.8% | | Group same-store sales | 1,447 | | 1,431 | | 1.1% | | Closing inventory | 513 | | 514 | | (0.2%) | | Inventory turnover days | 108 | | 119 | | (11) | | Number of stores at period end | 1,668 | | 1,774 | | (106) | - Excluding the adverse impact of the non-Giordano brand in Indonesia, the Group's revenue would have grown by 3.8%, and profit attributable to shareholders would have reached HK$146 million[30][33] Revenue and Gross Profit Analysis Revenue grew 1.6% with a 1.1% rise in same-store sales, while gross margin declined due to channel mix and inventory clearance - The Group's revenue grew by 1.6% with a 1.1% increase in same-store sales, demonstrating the resilience of its business model[32] - Revenue in Greater China grew by 9.5%, primarily driven by online business expansion under the "Digital First" strategy[33] - Online sales surged by 26.1%, accelerating to 32.3% in Q2, largely due to the success of the "Digital First" strategy in Mainland China[35] - Wholesale channel revenue grew by 20.2%, driven by strong demand in franchise markets, particularly the Philippines[35] - Gross profit margin decreased by 3.3 percentage points to 55.6%, mainly due to a higher mix of online and wholesale business, strategic clearance, and rising merchandise costs[38] Revenue Analysis (For the six months ended June 30) | Category | 2025 (HK$ million) | Contribution (%) | 2024 (HK$ million) | Contribution (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | By Market | | | | | | | Greater China | 878 | 45.4% | 802 | 42.1% | 9.5% | | Southeast Asia & Australia | 688 | 35.6% | 739 | 38.9% | (6.9%) | | GCC | 368 | 19.0% | 362 | 19.0% | 1.7% | | By Channel | | | | | | | Offline business | 1,416 | 73.2% | 1,483 | 77.9% | (4.5%) | | Online business | 280 | 14.5% | 222 | 11.7% | 26.1% | | Total retail | 1,696 | 87.7% | 1,705 | 89.6% | (0.5%) | | Total wholesale to franchisees | 238 | 12.3% | 198 | 10.4% | 20.2% | Other Income and Other Gains, Net Net other income and gains increased significantly, primarily driven by higher foreign exchange gains - The increase in net other income and other gains was mainly due to an increase in foreign exchange gains[40] Operating Expenses and Operating Profit Operating expenses as a percentage of revenue improved, though operating profit declined to HK$179 million - Operating expenses as a percentage of revenue decreased by 0.6 percentage points to 48.9%, reflecting strict and effective cost management[41] - Operating profit was HK$179 million with an operating margin of 9.3%, a year-on-year decrease of 11.4%[42] - Excluding the impact of the non-Giordano brand in Indonesia, the core brand's operating profit would have been HK$185 million, with an operating margin of 10.2%[42] Net Impairment Loss The Group recognized a net impairment provision of HK$2 million for right-of-use assets and equipment - The Group made a net impairment provision of HK$2 million for right-of-use assets and property, plant and equipment during the period[43] Finance Costs Finance costs of HK$23 million were primarily attributable to imputed interest on lease liabilities - Finance costs were HK$23 million (2024: HK$22 million), mainly comprising imputed interest on lease liabilities[44] Profit Attributable to Shareholders Profit attributable to shareholders remained stable at HK$121 million, with a lower effective tax rate - Profit after tax attributable to shareholders was HK$121 million, remaining stable compared to the previous year[45] - Had the profitability of the non-Giordano brand in Indonesia and the South Korea joint venture remained at last year's levels, attributable profit would have reached HK$146 million[45] - The effective tax rate decreased to 14.7%, mainly due to a favorable shift in the tax regime mix and the reversal of tax provisions[46] Market Analysis Greater China revenue grew 4.2%, driven by online initiatives, while Southeast Asia declined due to non-core brand performance Greater China Greater China revenue grew 4.2% year-on-year, with robust same-store sales growth of 6.2% - Revenue in Greater China grew by 4.2% year-on-year, with strong Q2 growth of 6.9% and robust same-store sales growth of 6.2%[59] Hong Kong and Macau The Hong Kong and Macau market saw a significant recovery in the second quarter, driven by a successful "Minions" collaboration - The Hong Kong and Macau market saw a 2.2% positive revenue growth in Q2, reversing the Q1 decline, primarily driven by the "Minions" collaboration[50] - H1 revenue saw a slight decline of 2.2%, outperforming the overall apparel retail sales performance announced by the HKSAR Government[50] - The Giordano Ladies brand will be transformed into a more modern, relaxed "Refined Elegance" style, with a new store opening in Causeway Bay[52] Mainland China Total revenue in Mainland China grew 13.0%, driven by significant online business growth of approximately 30.0% - Total revenue in Mainland China grew by 13.0%, with Q2 growth near 18.0%, and the online business achieved significant year-on-year growth of approximately 30.0%[53] - Gross profit margin improved significantly, increasing by nearly 12 percentage points quarter-on-quarter, closely tied to the "Digital First" strategy[54] - Offline same-store sales were nearly flat in Q2, as the restructuring plan focused on Southern China and closed loss-making stores[55] Taiwan Taiwan's revenue saw a low single-digit decline, though the online channel grew by 18.2% - The Taiwan market recorded a low single-digit percentage decline in revenue, but the online channel grew by 18.2% year-on-year[57] Greater China Revenue and Store Statistics (For the six months ended June 30, at constant exchange rates) | Region | 2025 Revenue (HK$ million) | 2024 Revenue (HK$ million) | Change (%) | 2025 Closing Stores | 2024 Closing Stores | | :--- | :--- | :--- | :--- | :--- | :--- | | Mainland China | 339 | 300 | 13.0% | 359 | 454 | | Taiwan | 200 | 206 | (2.9%) | 163 | 161 | | Hong Kong & Macau | 177 | 181 | (2.2%) | 50 | 41 | | Total | 716 | 687 | 4.2% | 572 | 656 | Greater China Profit Before Tax (For the six months ended June 30, at constant exchange rates) | Indicator | 2025 (HK$ million) | % of Revenue | 2024 (HK$ million) | % of Revenue | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 716 | 100.0% | 687 | 100.0% | 4.2% | | Gross profit | 401 | 56.0% | 404 | 58.8% | (0.7%) | | Operating profit | 7 | 1.0% | 23 | 3.4% | (69.6%) | | Profit before tax | 2 | 0.3% | 19 | 2.8% | (89.5%) | Southeast Asia and Australia Revenue in this region declined by 8.0%, primarily due to the weak performance of non-Giordano brands in Indonesia - The region's revenue decreased by 8.0%, mainly due to weak performance in the Indonesian business, particularly non-Giordano brands; excluding this impact, the decline was limited to 4.6%[61] - The e-commerce channel in Southeast Asia (excluding non-Giordano brands) showed strong performance, achieving nearly 42.0% year-on-year growth[62] Southeast Asia and Australia Profit Before Tax (For the six months ended June 30, at constant exchange rates) | Indicator | 2025 (HK$ million) | % of Revenue | 2024 (HK$ million) | % of Revenue | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 680 | 100.0% | 739 | 100.0% | (8.0%) | | Gross profit | 389 | 57.2% | 450 | 60.9% | (13.6%) | | Operating profit | 84 | 12.3% | 133 | 18.0% | (36.8%) | | Profit before tax | 73 | 10.7% | 122 | 16.5% | (40.2%) | Southeast Asia and Australia Revenue and Store Statistics (For the six months ended June 30, at constant exchange rates) | Region | 2025 Revenue (HK$ million) | 2024 Revenue (HK$ million) | Change (%) | 2025 Closing Stores | 2024 Closing Stores | | :--- | :--- | :--- | :--- | :--- | :--- | | Indonesia | 342 | 382 | (10.5%) | 199 | 231 | | Thailand | 116 | 127 | (8.7%) | 154 | 157 | | Singapore | 105 | 100 | 5.0% | 31 | 30 | | Malaysia | 78 | 84 | (7.1%) | 84 | 87 | | Vietnam | 30 | 34 | (11.8%) | 28 | 35 | | Australia | 7 | 10 | (30.0%) | 3 | 5 | | Cambodia | 2 | 2 | Flat | 2 | 2 | | Total | 680 | 739 | (8.0%) | 501 | 547 | GCC The GCC business achieved 1.9% revenue growth and maintained stable profitability despite geopolitical tensions - The GCC business achieved 1.9% year-on-year revenue growth, with online sales surging by 33.3%[64][65] GCC Profit Before Tax and Store Statistics (For the six months ended June 30, at constant exchange rates) | Indicator | 2025 (HK$ million) | % of Revenue | 2024 (HK$ million) | % of Revenue | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 369 | 100.0% | 362 | 100.0% | 1.9% | | Gross profit | 233 | 63.2% | 233 | 64.3% | Flat | | Operating profit | 73 | 19.8% | 76 | 21.0% | (3.9%) | | Profit before tax | 67 | 18.2% | 69 | 19.1% | (2.9%) | | Closing stores | 186 | | 179 | | 7 | South Korea Joint Venture The South Korea joint venture faced challenges, resulting in a share of loss due to a weak economy and intense competition - The South Korea joint venture faced challenges, resulting in a share of loss due to a weak economy and intense competition[66] - The Group is actively collaborating with stakeholders and leveraging expertise from its Korean operations, successfully launching a Korean collection in Mainland China and Hong Kong[67] South Korea Share of Net (Loss) Profit and Store Statistics (For the six months ended June 30, in KRW million) | Indicator | 2025 | % of Revenue | 2024 | % of Revenue | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 65,545 | 100.0% | 77,640 | 100.0% | (15.6%) | | Gross profit | 33,884 | 51.7% | 41,936 | 54.0% | (19.2%) | | Net (loss) profit | (139) | (0.2%) | 5,486 | 7.1% | (102.5%) | | Share of net (loss) profit | (67) | | 2,662 | | (102.5%) | | Closing stores | 114 | | 115 | | (1) | Overseas Franchisees and Licensees The overseas franchisee network achieved substantial growth, with wholesale revenue increasing by nearly 34.0% - Wholesale revenue from overseas franchisees and licensees surged by nearly 34.0% year-on-year, with particularly strong performance in the Philippines[68] - Store count is expected to increase, especially in high-potential emerging markets like Africa and South Asia[69] Overseas Franchisee Closing Store Statistics | Region | 2025 Closing Stores | 2024 Closing Stores | | :--- | :--- | :--- | | Southeast Asia | 185 | 183 | | South Korea | 114 | 115 | | South Asia | 103 | 89 | | Africa | 29 | 26 | | Other Markets | 22 | 20 | | Total | 453 | 433 | Financial Position The Group maintains a solid financial position with increased net cash, a low gearing ratio, and improved inventory management Liquidity and Financial Resources The Group's net cash and bank balances increased to HK$722 million, indicating continued financial stability - Cash and bank balances, net of bank loans, increased year-on-year to HK$722 million, demonstrating continued financial stability[70] - The gearing ratio was 1.2% (2024: 1.3%) and the current ratio was 1.6 (2024: 1.5), indicating a solid financial position[70] Property, Plant and Equipment Capital expenditure for the period was HK$33 million, primarily for store upgrades and relocations - Capital expenditure for the period was HK$33 million (2024: HK$27 million), mainly for store upgrades and relocations[71] Goodwill and Put Option Liabilities Granted Goodwill from the GCC acquisitions was tested for impairment with no impairment recognized - Goodwill and put option liabilities arose from the 2012 and 2015 acquisitions of the GCC business, and it has been confirmed that no goodwill impairment occurred[72] Interest in South Korea Joint Venture The carrying value of the South Korea joint venture decreased by 5.2% to HK$417 million - The carrying value of the South Korea joint venture decreased by 5.2% to HK$417 million, mainly due to fluctuations in the Korean Won and dividend income[73] Inventory Management Inventory turnover days improved significantly by 11 days to 108 days, reflecting more effective inventory management - Inventory turnover days improved significantly, decreasing by 11 days to 108 days, highlighting a commitment to more effective inventory management[74] - Strategic price promotions successfully cleared aged inventory from previous years, aligning the inventory mix with current consumer preferences[74] System Inventory (As at June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Inventory owned by the Group | 513 | 514 | | Inventory held by the 48.5%-owned South Korea joint venture | 293 | 181 | | Inventory held by Mainland China franchisees | 34 | 34 | | Finished goods at suppliers | 6 | 11 | | Total inventory not owned by the Group | 333 | 226 | | Total system inventory | 846 | 740 | Trade and Other Receivables and Payables Receivable and payable turnover days were 46 and 45 days, respectively - Trade receivable and payable turnover days were 46 days (2024: 38 days) and 45 days (2024: 45 days), respectively[77] - The increase in trade payables was mainly due to the early receipt of Autumn/Winter merchandise scheduled for a July launch, causing a timing difference in payments[77] Outlook and Strategy "Beyond Boundaries" Five-Year Strategy The Group is embarking on a new chapter guided by its "Beyond Boundaries" five-year strategy to become a growth company again - The "Beyond Boundaries" five-year strategy is the Group's "North Star," aiming to reset, reallocate, and revitalize the business to become a growth company again[78] - 2025 is a year of reset, laying the foundation for the next phase of sustainable growth with a focus on product excellence, operational agility, and customer centricity[79] Revitalizing Brand Portfolio The strategy focuses on Giordano products, optimizing the product lifecycle and launching the new Giordano Concepts (GC) brand - The focus is on Giordano-branded products, optimizing design, development, sourcing, and delivery, and using advanced analytics to enhance supply chain responsiveness[80] - The new brand, Giordano Concepts (GC), targeting young, tech-savvy female consumers aged 20-35, will be launched online in Mainland China in September[82] - Giordano Ladies will be transformed into a more modern, relaxed "Refined Elegance" style, leveraging Giordano Korea as a brand ambassador to build its image for female consumers[83] Digital First The Group will accelerate its digitalization journey to meet the needs of a younger, digitally native generation - The digitalization journey will be accelerated by developing products for Tmall and Douyin, and launching the Giordano Ladies collection and GC brand to connect with Gen Z and Millennials[84] - Digital tools and data-driven processes, including AI-powered demand forecasting and personalized marketing, will be embedded into daily operations to create an omnichannel ecosystem[85] Win in Greater China Greater China is identified as a "must-win" strategic market, with a two-pronged approach for Mainland China - Greater China is considered a "must-win" strategic market, with a two-pronged restructuring plan for Mainland China[86] - The plan will accelerate the e-commerce business, focusing on product development for Tmall and Douyin to achieve positive growth and profitability[89] - The physical retail business will be restructured by closing loss-making stores and focusing on Southern China with increased brand investment, resulting in nearly flat comparable store sales in Q2[89] - Hong Kong will serve as a model city to pilot new products and concepts, with positive progress seen in Q2[86] One Giordano "One Giordano" aims to establish a centralized creation and planning model with excellent in-market execution - "One Giordano" aims to establish a headquarters and market operating model where creation and planning are centralized for excellent in-market execution[87] - The organizational structure will be reshaped from a traditional regional silo model to a more agile matrix model to enhance cross-functional team capabilities[88] - Back-end operations will be streamlined, supply chain and sourcing functions rebuilt, and investments made in employee training to foster a culture of agility and collaboration[88] Reshaping the Organization and Transformation The transformation focuses on fostering a culture of agility, collaboration, and continuous learning under new management - The organizational structure is shifting from a traditional regional silo model to a more agile matrix model to enhance cross-functional capabilities and accelerate decision-making[88] - Back-end operations are being streamlined, supply chain and sourcing functions rebuilt, and investments made in employee training to foster a culture of agility and collaboration[88] - The goal for 2025 is to sow the seeds by investing in systems, capabilities, and culture to set the stage for Giordano to thrive in the years to come[91] Shared Vision The Group is confident in its future, aiming to inspire customer confidence through excellent products and memorable experiences - The Group's purpose remains constant: to inspire customers' confidence and self-expression through excellent products and memorable experiences[92] - With a clear vision, a robust strategy, and a passionate team, Giordano is ready for its next phase of growth, turning challenges into opportunities[92] Other Information Human Resources As of June 30, 2025, the Group employed approximately 6,500 staff and invested heavily in training and development - As of June 30, 2025, the Group had approximately 6,500 employees[94] - The Group offers competitive remuneration, target-based bonuses, performance-based incentive schemes, and share options to reward and retain its high-caliber leadership team[94] - Significant investments are made in training for sales and customer service, management, planning, and leadership development[94] Interim Dividend Policy and Distribution The Board declared an interim dividend of 7.5 HK cents per share, payable on October 3, 2025 - The Board declared an interim dividend of 7.5 HK cents per share for the six months ended June 30, 2025 (2024: 8.0 HK cents per share)[95] - The dividend will be paid on October 3, 2025, to shareholders on the register as of September 19, 2025[95] - The register of members will be closed from September 18, 2025, to September 19, 2025, to determine entitlement to the interim dividend[96] Corporate Governance The Company complied with the Corporate Governance Code, with an exception for the rotation of the Chairman and Managing Director - During the review period, the Company complied with all applicable provisions of the Corporate Governance Code, except for code provision B.2.2 (rotation of directors)[97] - The Board believes that continuity in the roles of the Chairman and Managing Director is beneficial to the Group, thus exempting them from retirement by rotation[97] - The Company has adopted a code of conduct for securities transactions by directors and confirmed that all directors have complied[98] Securities Transactions and Buybacks No purchase, sale, or redemption of the Company's listed securities was made by the Group during the period - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[99] Review of Interim Results The unaudited interim financial information has been reviewed by PricewaterhouseCoopers and the Audit Committee - The Group's interim financial information has been reviewed by PricewaterhouseCoopers in accordance with Hong Kong Standard on Review Engagements 2410[100] - The Audit Committee has reviewed accounting principles, risk management, internal control systems, and financial reporting matters, and has reviewed the interim results with management[100]