Chow Tai Fook’s Hong Kong and Macau same-store sales rise 29.6% as mainland franchise sales fall 2.9% and network shrinks

Chow Tai Fook’s latest quarterly operating figures show diverging market performance: same-store sales rose in Hong Kong and Macau but fell at franchised stores in mainland China, where the retail network continued to contract. For those considering franchise opportunities in Hong Kong, the key is not simply whether the brand’s overall performance improved or weakened, but how results differed by region and operating model.

Hong Kong and Macau growth fails to offset mainland retail sales decline

According to an October 28 report by Jiemian News, citing unaudited operating figures disclosed by Chow Tai Fook to the Hong Kong Stock Exchange, the group’s overall retail sales value edged down 0.5% year on year in the second quarter of FY2027. Mainland retail sales value fell 5.3%, accounting for 83.3% of the group total. Hong Kong, Macau and other overseas markets recorded growth of 33.2%, contributing the remaining 16.7%.

Same-store sales in Hong Kong and Macau rose 29.6%, including a 43.5% increase in gold jewellery priced by weight. The report attributed the region’s performance to a recovery in tourist traffic.

It is important to distinguish the scope of these figures: 33.2% represents retail sales value growth across Hong Kong, Macau and other overseas markets combined, while 29.6% is the same-store sales increase for Hong Kong and Macau. The figures are not interchangeable, and neither represents growth in Hong Kong alone.

Mainland franchised and directly operated stores follow different trends

During the same quarter, same-store sales at Chow Tai Fook’s directly operated mainland stores rose 2.2%, while franchised stores recorded a 2.9% decline. The retail sales contribution from mainland Chow Tai Fook Jewellery franchised stores fell to 61.6%, highlighting the difference in performance between the franchised and directly operated networks.

Overall mainland same-store sales volume fell 9.7%, also showing that sales value and the number of items sold did not move in step. By product category, mainland same-store sales of fixed-price jewellery rose 11.1%, while gold jewellery priced by weight grew 1.7%. The same-store average selling price of gold jewellery priced by weight rose to HK$10,200, while the average selling price of fixed-price gold jewellery was HK$10,100.

Sales value alone is therefore not enough to assess the brand’s operating performance. Higher spending per transaction can support sales value without indicating broad-based growth in transaction numbers or customer demand. For prospective franchise investors, same-store performance broken down by operating model is more informative than a single group-wide growth figure.

Mainland network shrinks by a net 240 retail outlets — not necessarily all franchises

During the quarter, Chow Tai Fook’s mainland retail network contracted by a net 240 outlets. At the end of September, it had 4,807 mainland stores, down 2,596 from its historical peak of 7,403. Franchised stores still accounted for 68.3% of mainland Chow Tai Fook Jewellery stores.

These figures require separate interpretation. The proportion of stores that are franchised is not the same as their contribution to retail sales. Nor can a net reduction of 240 mainland retail outlets be described as the closure of 240 franchised stores. A net change is also different from the total number of closures.

The group attributed the mainland sales decline to network optimisation and a relatively high comparison base in the previous year. Meanwhile, store numbers in Hong Kong, Macau and overseas markets recorded a small net increase, bringing the group’s total retail network to 5,192 outlets at the period end. Network adjustments therefore did not involve contraction across every market.

Read the profit forecast separately from store operating performance

In a separate profit forecast issued on October 22, Chow Tai Fook said it expected net profit for the six months ended 30 September 2026 to rise by approximately 90% to 100% year on year. The main driver was a fair-value gain from the revaluation of gold loan contracts, compared with a fair-value loss in the corresponding period a year earlier, alongside support from improved sales in core markets.

This is a half-year profit forecast, not a measure of franchised stores’ profitability in the second quarter. Group-level valuation gains cannot be used to estimate an individual franchise’s cash flow or payback period. The company also cautioned that gold price volatility would continue to affect full-year results.

The practical takeaway: investors assessing jewellery franchises in Hong Kong should request operating data broken down by region and by directly operated versus franchised stores. Same-store sales value, sales volume, net changes in outlet numbers and sources of profit should be checked separately, rather than using group profit growth as a substitute for assessing the viability of an individual store.