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Lj Intl (JADE) – Comments & Business Outlook
- Operating Revenue in the second quarter 2012 increased 6% year-over-year to US$42.75 million from US$40.17 million.
- Net loss in the second quarter 2012 was US$1.91 million, compared to a net income of US$3.75 million in the second quarter 2011. Basic and diluted loss per share were both US$0.15, compared to basic and diluted earnings per share of both US$0.05, in the second quarter 2011.
Yu-Chuan Yih, Chairman and Chief Executive Officer of LJ International, commented on the results. “In the face of a bleak global economy and decelerated Chinese economic growth, the jewelry sector has seen a prominent slowdown in the second quarter, especially in discretionary gem set items, and has affected the industry as a whole. As a jeweler with close to half our revenue exposure in gem-set jewelry, we felt a greater impact than jewelers with a higher proportion on gold jewelry.”
“We responded to this challenge on multiple fronts. First, we cut our marketing expenses to below 6% over sales. Second, we developed and launched more diamond and gem-set jewelry at a lower entry price point range to capture a broader segment of consumers and sustain a similar margin profile to protect our profitability. Third, we realigned our stores by replacing the non-performing stores with new openings in much better locations which carried a broader appeal. With our core competencies of innovative design and craftsmanship, we achieved across-the-board revenue growth in all markets for our wholesale business, resulting in a performance in line with our expectations.
“We believe these strategic initiatives will ensure we are best positioned to capitalize on growth opportunities in market upturns.”
The Third Quarter and 2012 Guidance:
The third quarter is traditionally a stronger quarter than the second quarter, the Company expects operating revenue for the third quarter 2012 to be higher than that of second quarter and expects a modest year-over-year growth in revenue.
With the market slow down, the Company revises its expectations for retail revenue for full year 2012, anticipating it to be in the range of US$130 million to US$133 million, which represents a 15% to 18% year-over-year growth. Wholesale revenue is expected to maintain at a similar level as in 2011. This represents our current and preliminary view, which is subject to change.
2012-09-06 06:27:57
Source: http://geoinvesting.com/companies/jade_lj_intl/research/comments_business_outlook/0039592
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