Clothing and toy supplier Li & Fung said it would miss targets under its three-year plan after reporting a profit drop for the first time in four years due to sluggish major markets and the surging cost of a restructuring scheme.
It posted a worse-than-expected net profit of US$617 million for the year to December, down 9 per cent year on year. Turnover grew 1 per cent to US$20.2 billion, also lower than market estimates.
Chief executive Bruce Rockowitz said yesterday that Li & Fung would not be able to achieve the plan it set for 2011 to 2013. The goal was for US$1.5 billion in operating profit this year.
Li & Fung's core operating profit was only US$511 million last year, compared with US$882 million a year earlier.
The world's largest supplier of clothes and toys to retailers has been hit by the weak economy in the United States, which represents 62 per cent of its total turnover. The European consumer market, which accounted for 19 per cent of the turnover, was also slack during the reporting period.
