Higher operating expenses eat into profits at The Hour Glass

Luxury watch retailer The Hour Glass has posted a 6.6 per cent drop in first quarter net earnings to $8.8 million.

Revenue grew by 14 per cent to $154.7 million for the three months to June 30.

This was attributed to an expanded retail network and increased marketing activities.

Gross margins were marginally lower at 21.6 per cent compared to 22.2 per cent in the same period last year, due to a more competitive marketplace.

Operating expenses were higher due to increased salaries and rentals.

Earnings per share dipped to 3.75 cents from 3.98 cents previously while net asset value per share firmed to $1.43 compared to $1.41 as at March 31.

Looking ahead, the retailer noted that continued global economic uncertainty coupled with slowing Asian economies are expected to affect consumer sentiment and the demand for luxury goods.

Barring any unforeseen circumstances, the group is cautiously optimistic of its outlook for the remainder of the financial year.