ESPRIT HOLDINGS (00330) expects the shareholders' share of unaudited comprehensive loss for the year 2025 to narrow to approximately 7 million Hong Kong dollars compared to the previous year.

Esprit Holdings (00330) announced that it is expected to have a comprehensive unaudited loss attributable to shareholders of approximately HK$70 million for the year ending December 31, 2025, compared to a loss of approximately HK$1.227 billion for the year ending December 31, 2024 (comparative year). The decrease in the loss is mainly attributed to a significant reduction in operating expenses of continuing operations, as well as non-recurring termination merger income generated by the group's restructuring plan. Following a comprehensive restructuring in 2024, this year marks a key turning point for the group's strategic transformation towards a light asset and licensing-centric business model. As this year is the first year of its licensing business operation, the group's revenue for this year is maintained at a lower level of approximately HK$20 million, compared to approximately HK$42 million in the comparative year. The decrease in revenue is mainly due to the termination of licensing income from the European trademarks (transferred to Deichmann SE's wholly-owned subsidiary fasbra SE). The transfer was executed in accordance with a settlement agreement resulting from a self-administered insolvency proceeding of the company's former German subsidiary approved by the court. By retaining trademarks in all regions outside of Europe (excluding the US footwear business), the group has laid a solid foundation for the future development and expansion of its licensing business. For continuing operations, the group recorded a net loss of approximately HK$29 million for this year, compared to a net loss of approximately HK$287 million in the comparative year. The decrease is mainly attributed to a significant reduction in operating expenses of continuing operations. Operating expenses for this year decreased to approximately HK$45 million, an 86% decrease from approximately HK$311 million in the comparative year (after excluding non-recurring items from the comparative year). These non-recurring items include impairment of trademarks, rights of use assets, and property, plant, and equipment totaling approximately HK$119 million, and impairment of loans to a joint venture and trade receivables totaling approximately HK$28 million. The reduction in operating expenses is partially due to the termination of the European trademark licensing business and the corresponding elimination of related costs. Even after taking into account the termination of the European trademark licensing business and the elimination of the non-recurring items mentioned above, the group's operational efficiency has significantly improved this year. This demonstrates significant progress the group has made in strengthening its cost structure and improving operational capital efficiency this year. Regarding discontinued operations, the group recorded a net loss of approximately HK$22 million for this year, stemming from a non-recurring termination merger income, compared to a net loss of approximately HK$940 million in the comparative year, further reducing the attributable loss to shareholders for this year.