Retailing, Franchising, and Consumerism Business Intelligence in China

Lianhua Supermarket Forecasts Profit Drop With Steep Competition

Lianhua Supermarket Holdings Company Ltd. says that by September 30, 2014, the group achieved unaudited operating revenue of about CNY24.168 billion; its operating costs were about CNY19.217 billion; and its net profit attributable to shareholders was about CNY51.164 million.

During the reporting period, Lianhua Supermarket's unaudited asset scale in China was about CNY18.742 billion.

Lianhua Supermarket said that due to the severe competition in the retail market and the increase of costs, especially labor costs, the company's net profit attributable to shareholders saw a year-on-year decrease over the first nine months of 2014. The company predicted that its net profit for the entire year of 2014 will also see a year-on-year decrease.

Over the first six months of 2014, Lianhua Supermarket reported operating revenue of CNY15.03 billion, a year-on-year decrease of 3.7%; its gross margin was 14.44%, a year-on-year increase of 0.26 percentage point; and its net profit was CNY98 million, a year-on-year decrease of 51.1%. According to the company, the net profit decrease was mainly attributed to the decrease of sales and the increase of management expense for its China operations.

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