Time Watch (HKEX: 02033) has issued a profit warning, expecting a loss attributable to shareholders of approximately HK$80 million to HK$83 million for fiscal year 2026, a significant increase from the roughly HK$17.5 million loss recorded in the year ended June 30, 2025.

The board attributes the deterioration to three key factors. First, group revenue for fiscal 2026 is projected to decline about 12% year-on-year, primarily due to global trade tensions that have dampened consumer sentiment in the People's Republic of China retail market, adversely impacting local economic activity and employment growth.

Second, the company anticipates recognizing impairment losses on property, plant and equipment and right-of-use assets, in addition to loss provisions for certain sales outlets affected by weak performance linked to the sluggish Chinese retail environment during fiscal 2026.

Third, other income, gains and losses are expected to decrease, driven by lower interest income, losses from fair value changes on financial assets measured at fair value through profit or loss, and net exchange losses.