Core Viewpoint - Giordano International (00709) reported a slight increase in revenue and profit for the first half of 2025, but faced challenges with declining gross margins due to changes in channel mix and rising costs [1] Financial Performance - Revenue for the first half of 2025 reached HKD 1.934 billion, representing a year-on-year growth of 1.63% [1] - Shareholders' profit attributable to the company was HKD 121 million, an increase of 0.83% year-on-year [1] - Basic earnings per share were HKD 0.075, with an interim dividend of HKD 0.075 per share [1] Gross Margin Analysis - The gross margin decreased by 3.3 percentage points to 55.6%, leading to a 3.9% decline in gross profit [1] - The decline in gross margin was partly due to a shift in channel mix, with online and wholesale businesses contributing more significantly than planned, but these channels generally have lower margins compared to offline channels [1] - Strategic clearance of outdated inventory further exacerbated the situation, along with rising product costs [1] - Excluding the impact of non-Giordano brands, gross margin and gross profit would have decreased by 2.9 percentage points and 1.1% respectively [1] Future Outlook - Management anticipates an improvement in gross margin in the second half of the year, with more stable inventory levels and enhanced procurement processes [1] - The company aims to maintain product quality while improving cost efficiency [1]

Core Insights - Giordano International (00709) reported a mid-year revenue of HKD 1.934 billion for 2025, reflecting a year-on-year growth of 1.63% [1] - The company's profit attributable to shareholders reached HKD 121 million, marking a 0.83% increase compared to the previous year [1] - Basic earnings per share stood at HKD 0.075, with an interim dividend of HKD 0.075 per share [1] Financial Performance - The gross profit margin decreased by 3.3 percentage points to 55.6%, resulting in a 3.9% decline in gross profit for the first half of 2025 [1] - The decline in gross margin was partly due to changes in the channel mix, with online and wholesale businesses contributing more significantly than originally planned, but these channels generally have lower margins compared to offline channels [1] - The situation was exacerbated by a strategic clearance of outdated inventory accumulated over the past few years, along with rising product costs impacting the gross margin [1] Future Outlook - Excluding the impact of non-Giordano brands, the gross margin and gross profit would have declined by 2.9 percentage points and 1.1% respectively [1] - Management anticipates an improvement in gross margin in the second half of the year, as inventory levels stabilize and procurement functions and processes become more specialized, which will enhance cost efficiency while maintaining product quality [1]