Hong Kong-based fashion retailer Esprit Holdings operates shops and franchises in more than 40 countries.
Last week the company surprised analysts and the market by posting a 61.2 per cent year-on-year surge in net profit for the year to June 30.
The main factor in the surprise result was a HK$121 million tax credit relating to a change in German withholding-tax legislation. Excluding this item, an ABN Amro report said, core earnings increased 40 per cent year on year to HK$806 million.
The brokerage said this was marginally below its profit expectation of HK$817 million, but reassured clients by saying the 'quality' of earnings growth had surpassed expectations.
The 14 per cent year-on-year increase in group revenue to HK$9.2 billion was wholly attributable to Europe, which posted a 20 per cent year-on-year increase in sales to HK$6.85 billion.
The brokerage maintained its 'buy' recommendation on the stock.
