A weak retail scene hit second-quarter sales at Osim International.
Revenue for the three months to June 30 was down 12.7 per cent to $159.5 million, while net profit declined 25.5 per cent to $21.9 million.
Despite soft retail sales across its core countries, "our dominant brand has enabled us to maintain a stable gross margin and cash-generative business", the company said yesterday.
Osim operates in 23 countries. Its main markets are in North Asia, with 58 per cent of revenue, and South Asia, with 38 per cent. The company has 560 Osim outlets in all. "China continues to be our No. 1 market where we are in 45 cities with 251 outlets. New products, including uMagic, uInfinity Luxe, uDiva, uHip, uSqueez Air, uTrek and uShape Music, have sustained our dominant position in the market," the company said.
It has a further 220 GNC/RichLife outlets in its subsidiary ONI Global, and is growing sales through new product launches, it added. It shed 13 outlets in the second quarter.
AT A GLANCE
REVENUE: $159.5 million (-12.7%)
NET PROFIT: $21.9 million (-25.5%)
INTERIM DIVIDEND: 2 cents per share (unchanged)
Subsidiary TWG Tea has 47 outlets and the company is targeting to open about 11 new outlets in the second half of the year, it said.
"We remain optimistic on the prospects for the remainder of the year following the launch of uMagic in key markets and upcoming planned product launches," it said.
The company bought back $29 million in shares during the quarter. It declared an interim dividend of two cents per share, similar to a year ago, to be paid on Oct 7.
Net asset value was 56 cents as at June 30, unchanged from Dec 31 last year. Earnings per share was 2.95 cents, down from 3.87 cents a year back.
The firm said its balance sheet had strengthened with consolidated net assets at $487 million, and total cash and cash equivalents and fixed income investments of $443 million as at June 30.
"We are continuing to invest for growth, supported by a strong balance sheet," it said.
Osim shares closed unchanged at $1.455 yesterday.