Esprit falls to 3-week low after profit warning

Esprit falls to 3-week low after profit warning

Stock Market Predictions

HONG KONG (Global Markets) - Shares of Esprit Holdings (0330.HK) fell 8.6 percent to its lowest in about three weeks after the Europe-focused clothing retailer warned of a sharp drop in yearly profit due to one-off restructuring costs.

The stock fell to as low as HK$19.96 before steadying at HK$20.15 as at 0200 GMT, still down 7.8 percent. That compared with a 0.76 fall in the benchmark Hang Seng Index .HSI.

Esprit said late on Thursday that it was set to post a sharp drop in 2010/11 profit as a result of one-off costs related to restructuring. Esprit, whose results are due on September 15, said its board had approved a strategic plan to restructure store operations.

Esprit, which competes with Swedish clothing retailer Hennes & Mauritz AB (HMb.ST), U.S. group GAP Inc (GPS.N) and Spain's Inditex SA (ITX.MC), had said earlier this year that its sales in Europe fell 3.6 percent in local currency terms for nine months ended in March, while Asia-Pacific sales rose 26.3 percent. Sales in Europe accounted for 79.1 percent of total turnover during the period.

(Reporting by Donny Kwok; Editing by Ken Wills)