Record prices of gold alongside continued macro uncertainties dented Hong Kong jeweller Luk Fook Holdings (International) Ltd’s profit for the fiscal year.

Net income fell 39.3 per cent to HK$1.07 billion (around US$135.31 million) for the year ending March 31, 2025, compared to HK$1.76 billion (approximately US$224.21 million) previously.

Revenues were down 12.9 per cent year on year to HK$13.34 billion (nearly US$1.7 billion) from HK$15.32 billion (about US$1.95 billion). 

“The high gold price affected consumer sentiment,” the group said in its earnings report, adding that gold prices rose nearly 30 per cent year on year during the period in review.

Sales of gold and platinum products by weight declined by 15 per cent while sales of fixed-price products dipped 7.6 per cent. Gold and platinum accounted for 70.9 per cent of Lukfook’s overall sales.

Markets

A year-on-year growth in mainland visitor arrivals to Hong Kong and Macau, meanwhile, did not reflect an increase in tourist spending.

According to Lukfook, consumers’ weaker buying power also meant lower per capita spending by mainland visitors in Hong Kong and Macau. The jeweller continued, “Consequently, the group recorded a decrease in retailing revenue from both regions, underscoring the impact of macroeconomic challenges and shifting consumption patterns on its business performance.”

The retail business in China, however, showed gradual improvements amid high gold prices and increased uncertainty from tariffs and China-US trade tensions.

Moving forward, Lukfook expects sales of gold products to resume to normal levels once consumers have adapted to high gold prices. It will also actively promote fixed-price gold and fixed-price diamond-set pure gold items to replace diamond-set 18-karat gold products. 

“With ongoing optimisation of fixed-price jewellery product mix and an improving mainland market, the group’s business performance may improve in the remaining months of fiscal year 2025/26,” it noted.

On the impact of US tariffs and heightened tensions in China-US relations, Lukfook said it remains “cautiously optimistic” about medium- and long-term business prospects in the mainland but expansion in this market will continue. The group targets to add 50 shops in China in fiscal year 2025/26 and allocate more resources for overseas expansion. It is ikewise looking to establish approximately 20 shops abroad during the financial year. 

“The group has set up its new three-year corporate strategy starting from fiscal year 2025/26 with overseas market expansion, market-oriented products and operational efficiency enhancement as the three main focus so as to foster future business growth,” it added.