I.T Crying For No Tears Today Issued Earnings Warning

Hongkong fashion retailer I.T Ltd., which released its first quarter results on Tuesday, issued a profit warning today, saying that the depreciation of the renminbi in the past three days would cost HK $60 million and would have an important impact on the medium-term profits.

Because

A significant depreciation of 2%, the Hong Kong dollar and the RMB exchange rate rose 1.71% and 1.04% respectively on Tuesday and Wednesday, the highest 0.8309, a nearly 50 month high.

Data show that as of the first half of August 31, 2014 fiscal year I.T Ltd.

For HK $49 million 419 thousand, if the above 60 million HK dollars were calculated, the profit and loss balance could be recorded in the first half of the fiscal year I.T Ltd. in the first half of the fiscal year, with a 20% increase in profits.

However, the company's first quarter results are not satisfactory, so it is expected that tens of millions of HK dollars will be lost in the medium term.

As of the first quarter of May 31st, I.T Ltd.

Comparable sales recorded a 0.5% decline, to promote sales group has begun to discount in April, in addition, the operating costs soared, gross margins fell 230 basis points to 59.1%; the mainland and Japanese markets respectively achieved 3.5% and 23.2% of comparable sales growth, the gross profit margin in mainland China rose 260 basis points to 62.7%, and Japan also rose 70 basis points to 68.8%. The gross profit margin of the group in the first quarter was 62.5%, which was only increased by 10 basis points by the Hongkong market.

I.T Ltd. the loss of the above HK $60 million was mainly due to the fact that the time deposit of the company's 1 billion 187 million yuan was due to the exchange of cash into the Hong Kong dollar yesterday or through the conclusion of a number of forward contracts.