Bank of America Securities has issued a research report indicating that CHOW TAI FOOK (01929) recorded a 0.2% year-on-year increase in same-store sales growth in Mainland China for the fourth quarter of fiscal year 2026, ending March 31. This represents a slowdown compared to the 21.4% growth seen in the third quarter and falls below the bank's expectation of a 5% increase. The firm has maintained its "Neutral" rating on CHOW TAI FOOK, with an unchanged target price of HK$13.1, based on a projected price-to-earnings ratio of 15 times for fiscal year 2027.

During the quarter, CHOW TAI FOOK recorded a net closure of 126 retail points in Mainland China, following a net closure of 231 stores in the previous quarter. In the Hong Kong and Macau markets, same-store sales growth accelerated to 40% year-on-year in the fourth quarter, up from 14.3% in the third quarter.

The report noted that CHOW TAI FOOK's management, during an earnings call, reaffirmed its guidance for all key metrics for fiscal year 2026. The company expects revenue to achieve low to mid-single-digit growth, with same-store sales growth in Mainland China projected to be in the mid to high single digits. Gross margin is anticipated to be between 31.5% and 32.5%, while the operating profit margin is forecast at 20%. Management also expects the number of store closures in fiscal year 2027 to be lower than in fiscal year 2026.