Shares of Belle International, the mainland's largest women's footwear retailer, rose nearly 5 per cent yesterday after reporting a 24 per cent rise in net profit last year. Yet analysts were mixed on the company's outlook.
Belle said net profit for the year to December rose to 4.25 billion yuan (HK$5.21 billion) from 3.42 billion yuan a year earlier. Revenue increased 22 per cent to 28.9 billion yuan thanks to 15 per cent growth in same store sales for its footwear.
The company also announced it will buy Big Step, a distributor of Nike and Adidas products with 600 stores on the mainland, for 880 million yuan to build its presence in the sportswear market.
Belle's share price closed 4.73 per cent higher yesterday at HK$14.18, against a 0.15 per cent fall in the Hang Seng Index.
Catherine Lim, an analyst with Citigroup Global Markets, said the 26 per cent growth in Belle's core footwear business was better than the financial services firm had expected. She rates the firm a buy.
'This more than offset the weaker sports distribution sales momentum and profitability,' she said in a note.
The sportswear business posted only mid-single-digit growth in same-store sales owing to weak consumer sentiment and big discounts by other firms in the market.