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Tag: widens

  • Berjaya Food Reports Rising Losses: Starbucks Malaysia’s Struggles Amid Middle East Conflict

    Berjaya Food Reports Rising Losses: Starbucks Malaysia’s Struggles Amid Middle East Conflict

    Berjaya Food, a Malaysia-based company, has recently reported a significant increase in losses and a decrease in sales for both their fourth quarter and the entire fiscal year. Berjaya Food, which operates Starbucks Coffee in Malaysia and Brunei, along with Kenny Rogers Roasters and Paris Baguette in Malaysia, experienced reduced sales due to a decrease in store numbers.

    Quarterly Report

    The revenue for the group, for the quarter ending on June 30, experienced a decrease of 11 per cent compared to the previous year, settling at RM115.8 million (US$27.4 million). This reduction is mainly attributable to the decrease in the number of store locations. However, the management has noted a slight increase in sales compared to the third quarter. This increment is primarily due to an improved sales performance from Starbucks Malaysia.

    In this quarter, the loss before tax increased from RM42.6 million to RM183.7 million. The primary reason for this increase was the impairment of property, plant, and equipment (PPE) and right-of-use (ROU) assets linked to non-performing stores.

    Annual Report

    For the entire fiscal year, the revenue dropped by 36 per cent, amounting to RM476.7 million. This drop is linked to the ongoing sentiment surrounding the Middle East conflict, which has affected market dynamics and altered customers’ purchasing behaviours.

    The pre-tax loss for the year broadened from RM89 million to RM288.7 million. This loss was due to the necessary impairment provision to PPE and ROU assets, resulting from the downsizing of Starbucks Malaysia’s operations.

    Questions & Answers

    What were the main reasons for the loss in Berjaya Food’s fourth quarter and fiscal year?
    The primary reasons were the impairment of property, plant, and equipment (PPE) and right-of-use (ROU) assets of non-performing stores, and also the downsizing of Starbucks Malaysia’s operations.

    Did Berjaya Food see any improvement in the fourth quarter compared to the third quarter?
    Yes, sales were slightly higher in the fourth quarter compared to the third, primarily due to improved sales performance at Starbucks Malaysia.

    How did the Middle East conflict affect Berjaya Food’s annual results?
    The ongoing conflict in the Middle East has influenced customers’ spending patterns and affected market dynamics, which contributed to the significant drop in the annual revenue.

  • Dolce & Gabbana Reports 4% Revenue Growth Despite Retail Challenges; Sets High Ambition For Beauty Division

    Dolce & Gabbana Reports 4% Revenue Growth Despite Retail Challenges; Sets High Ambition For Beauty Division

    Dolce & Gabbana, the revered Italian luxury fashion brand, has unveiled financial figures for the fiscal year that came to a close on March 31. The company saw its revenue climb by 4 per cent, translating to a total of US$2.2 billion.

    Revenue Drivers and Losses

    The primary catalyst behind this revenue growth was an 11 per cent surge in wholesale sales, accounting for 46 per cent of the brand’s total revenue. Unfortunately, the company also witnessed a 3 per cent decline in retail sales, indicative of challenges in crucial markets such as Europe and Asia.

    Despite the increase in revenue, Dolce & Gabbana’s net loss expanded to $136 million from the previous fiscal year’s figure of $15 million.

    Department Specific Performance

    Notably, the fashion and home division of the company experienced an 8 per cent revenue drop to $1.4 billion. This downturn is attributable to weakened demand in Europe and China, with the effect partially mitigated by gains in the Middle East, South America, and South Africa.

    On the other hand, the beauty segment posted strong figures, with sales escalating by 30 per cent year-over-year to approximately $699 million.

    Expansion and Future Endeavors

    From 2022 onwards, Dolce & Gabbana has broadened its makeup offerings to encompass more than 100 products. The brand plans to further expand this range to a complete line of 350 SKUs and has recently launched a skincare line, the Fresh Skin Collection.

    In terms of future goals, the company has set its sight on achieving $1.1 billion in annual beauty sales by the end of fiscal 2027. This objective emerges as part of their strategic shift from licensing to direct management of the beauty division.

    Additionally, Dolce & Gabbana has obtained $116 million in medium-term financing and has extended the maturity of a $345 million term loan to 2030.

    Questions & Answers

    What was the primary driver behind Dolce & Gabbana’s revenue growth?
    The primary driver was an 11 per cent increase in wholesale sales, which now account for 46 per cent of the brand’s total revenue.

    How did Dolce & Gabbana’s beauty segment perform in the past fiscal year?
    The beauty segment performed exceptionally well, with sales seeing a 30 per cent year-over-year increase to approximately $699 million.

    What are Dolce & Gabbana’s future plans for their beauty division?
    The company plans to achieve $1.1 billion in annual beauty sales by the end of fiscal 2027, following its strategic shift from licensing to direct management of the beauty division.