Suning Warns of 30% Profit Slump in H1 2012
Sina Tech, 7/16/12
Chinese consumer electronics and home appliances retailer Suning (002024.SZ) has downgraded its H1 2012 profit outlook, with net profits now expected to be down 20-30% YoY compared to RMB 2.47 bln in H1 2012 last year. As a result of the announcement, Suning shares were down 10% when the market closed on July 16.
Suning attributed the drop in profits to 1) due to the general economic climate and poor sales during the May 1 holidays and in June, which is traditionally peak season for air conditioner sales; 2) the impact on brick-and-mortar retailers from the rapidly expanding e-commerce sector; and 3) Suning continued to reorganize its retail outlets in Q2 2012, slowing the pace of new store openings and increasing store closures, resulting in lower offline sales than anticipated and affecting overall revenue growth.
Suning.com recorded RMB 5.28 bln in revenue including taxes for H1 2012, nearly reaching the RMB 5.9 bln target set by Suning chairman Zhang Jindong.
Editor's Note: For more background on this topic, please see "Suning.com H1 2012 Revenue Exceeds RMB 5 Bln" MD 7/16/12 issue.
Keywords: guidance Zhang Jindong consumer electronics e-commerce hardware profit retail revenue Suning 002024.SZ Q2 2012 H1 2012 Suning Yigou
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