Pou Sheng, the retail subsidiary of Yue Yuen, is forecasting a record decline in year-over-year net profit due to weak consumer sentiment in China due to Covid-19 outbreaks and lower store traffic in cities where it operates.
For the nine months ended Sept. 30, Pou Sheng is forecasting revenue of yuan renminbi 14,394 million (€1.98b), a decline of approximately 20 percent year-over-year, with corresponding net profit for the period expected to decline by 83 percent to about RMB 99 million (€13.6m). However, in the third quarter, the group was able to reverse a year-over-year loss with a net profit of approximately RMB 81 million (€11.2m).
Pou Sheng says it is adjusting its operational strategy to combat “sluggish” performance inside its brick-and-mortar locations. These efforts include a greater focus on digital, redefining retail regions and membership loyalty programs, and strengthening its online-offline integration. As we reported in early September, Pou Sheng accepted the resignation of chairman and CEO Lee Shac-Wu, replacing him with executive director Yu Huan-Chang.
The group will formally release results on Nov. 10.
