Esprit Global (00330) issued a profit warning. It is expected that the net loss due to shareholders in the medium term will be about HK$39 million year-on-year

According to the Zhitong Finance App, Esprit Global (00330) issued an announcement. It is expected that the Group will obtain about HK$39 million in net unaudited losses due to shareholders for the six months ending June 30, 2026 (interim period), while for the six months ending June 30, 2025 (comparison period), it will obtain an unaudited net profit attributable to shareholders of approximately HK$1 million.

Following the Group's comprehensive restructuring in 2024 to address past unsustainable costs and ongoing retail business losses, 2025 was a key turning point in the company's transformation to a licensing-centered strategy. In the medium term, the Group further consolidated its asset-light and licensing-centered business model. The Group's revenue from continuing operations gradually increased to approximately HK$15 million during the medium term, compared to approximately HK$7 million during the comparison period. This growth was mainly due to the gradual expansion of the scale and commercialization of the authorized business after the Group's strategic transformation.

In terms of continuing operations, the Group recorded net unaudited losses of approximately HK$39 million during the interim period, while net unaudited losses of approximately HK$21 million were recorded during the comparison period. The increase in losses was mainly due to an increase in operating expenses for continuing operations in the medium term. The related expenses were approximately HK$52 million, compared to approximately HK$26 million during the comparison period. The increase is mainly due to a one-time additional provision for legal and professional expenses arising from the arbitration proceedings disclosed in the Company's announcement dated July 10, 2026, amounting to approximately HK$25 million. The Group's related operating expenses (excluding the above legal and professional fees) were reduced from approximately HK$35 million during the comparison period to approximately HK$27 million in the medium term. This move shows that the Group continued to make progress in controlling the cost structure and improving working capital efficiency during the medium term. The company will continue to evaluate its cost base and strive to further improve operational efficiency.

As far as the termination of operations is concerned, the Group did not obtain an unaudited net profit during the interim period, while the unaudited net profit was approximately HK$22 million during the comparison period. The net profit in question came from the one-time income generated by the termination of the merger of the Company's Canadian subsidiaries.