Luk Fook Holdings Shines in First Quarter of 2025, Defying Market Headwinds with Robust Growth
Hong Kong, SAR – In a spectacular display of resilience and strategic prowess, Hong Kong-based jewellery giant Luk Fook Holdings (International) Ltd has announced stellar results for its first fiscal quarter, running from April to June 2025. The company reported a significant 13% year-on-year surge in overall retail sales value and a 14% rise in retail revenue, marking a decisive turnaround from a more subdued end to the previous fiscal year. This impressive performance underscores the company’s adept navigation of a complex global economic landscape, buoyed by powerful gains across its key markets in Mainland China, Hong Kong, and beyond.
The remarkable growth trajectory is a testament to what the company describes as its “effective branding and product differentiation strategies,” which have resonated deeply with consumers. Despite challenges such as fluctuating gold prices and geopolitical tensions, Luk Fook has not only weathered the storm but has emerged stronger, signaling a period of renewed momentum and consumer confidence.
Mainland China: The Engine of Unprecedented Growth
The standout performer in Luk Fook’s impressive quarterly report is undoubtedly Mainland China. The region has proven to be a formidable engine of growth, posting a remarkable 14% year-on-year increase in retail sales value and an even more striking 31% surge in retail revenue. These figures paint a picture of a market where consumer appetite for luxury goods remains robust, despite broader industry headwinds.
Astonishing Same-Store Sales Growth
Perhaps the most telling indicator of the health of Luk Fook’s Mainland operations is the phenomenal 19% jump in same-store sales. This figure, which measures sales in stores open for at least a year, points to sustained and strengthening demand at the grassroots level. It suggests that Luk Fook’s brand loyalty and product offerings are not just attracting new customers but are also encouraging repeat business from its existing clientele. The growth is particularly noteworthy given the intense competition and the after-effects of previous economic uncertainties. Analysts have pointed to this robust and sustainable consumer demand as a key factor in the company’s recovery momentum.
Licensed shops, which constitute about 94% of the store count in the Mainland, saw an 18% growth in same-store sales, highlighting the success of the company’s partnership model.
A Resilient Rebound in Hong Kong, Macau, and Overseas Markets
While Mainland China stole the spotlight, Luk Fook’s performance in its other core markets was equally commendable, showcasing a significant rebound. The Hong Kong, Macau, and overseas markets collectively recorded a 9% increase in retail sales value. This represents a significant turnaround from the 12% decline witnessed in the preceding quarter, with same-store sales moving into positive territory with a 3% increase.
The Bright Spark of Overseas Expansion
The overseas segment was particularly dynamic, posting a growth rate of nearly 20%. This highlights the success of Luk Fook’s global expansion strategy and its growing appeal to international consumers. The company has been actively expanding its global footprint, with new stores opened in the United States and Canada, aiming to attract a wider customer base and enhance brand recognition. The group is optimistic about the immense growth potential in these markets and plans to allocate more resources for expansion, with a target to add approximately 20 more stores in overseas markets within the current financial year.
In Hong Kong, same-store sales saw a modest but encouraging 1% rise, while Macau experienced a slight 1% dip. The overall positive trend, however, signals a stabilization and recovery in these crucial tourist-driven markets.
The Midas Touch: Fixed-Price Gold Products a Resounding Success
A cornerstone of Luk Fook’s triumphant quarter has been its strategic focus on fixed-price gold products. This category delivered a phenomenal 73% year-on-year growth, dramatically increasing its share of the overall sales mix. The retail sales value mix of fixed-price gold products surged from 11% to 19% in the first quarter. This strategic pivot has been instrumental in driving both sales and profitability.
The company stated that while volatile gold prices can impact overall sales performance, the higher profit margins associated with fixed-price products help to mitigate this effect. There are clear indications that consumers are gradually adapting to the higher price of gold, suggesting a potential normalization of gold sales in the near future. The average selling price for fixed-price gold products in the Mainland market saw a 44% increase, rising from RMB 1,100 to RMB 1,600.
Looking ahead, Luk Fook has committed to “actively promote” its fixed-price gold items, alongside innovative offerings like fixed-price diamond-set pure gold products. This strategy appears to be a direct and successful response to shifting consumer preferences, where the appeal of gold is moving beyond its investment value to become a statement of fashion and personal style.
A Strategic Shift in the Diamond Category
In response to market dynamics, Luk Fook has also been adjusting its strategy for diamond jewellery. While the demand for diamond products has been described as “subdued” and “sluggish,” the company has seen some improvement in this category. To capitalize on this, Lukfook is recalibrating its product and promotional strategies to bolster the performance of its diamond pieces.
However, the primary focus for now appears to be on non-diamond fixed-price jewellery. In a notable strategic move, the company is progressively replacing some of its diamond jewellery with gold products, aligning with a trend of Chinese consumers increasingly investing in the yellow metal. In Mainland China’s licensed shops, while fixed-price gold products surged by 58%, diamond products saw a 14% drop, underscoring this strategic shift.
Navigating the Global Economic Maze
Luk Fook’s leadership remains acutely aware of the broader economic challenges on the horizon. The company acknowledges the continuing impact of US tariff policies on the global economy and the heightened tensions in US-China relations. These tariffs have the potential to reshape the jewelry industry by altering sourcing patterns and increasing costs.
In this context, the Chinese government’s “dual circulation” strategy is viewed as a significant tailwind. This policy, which aims to vigorously boost domestic demand while maintaining external trade, is expected to support the gradual recovery and long-term growth of the Mainland market. Luk Fook remains “cautiously optimistic” about its medium- and long-term business prospects in the Mainland, citing this strategic governmental focus.
Store Network and Future Outlook
As part of its ongoing operational optimization, the retailer closed a net 125 stores in the first fiscal quarter, bringing its worldwide total to 3,162 as of June 30, 2025. This move is seen by some analysts as a strategic consolidation, even as the company continues its targeted expansion in high-potential overseas markets and plans a net addition of 50 shops in Mainland China for the fiscal year 2025/26.
Looking forward, Luk Fook has laid out a three-year corporate strategy focusing on Overseas Market Expansion, Market-Oriented Products, and Operational Efficiency Enhancement. The company’s strong performance in the first quarter, driven by its powerful branding, strategic product mix, and robust growth in Mainland China, has set a positive tone for the remainder of the fiscal year. With shares climbing and analysts taking a bullish view, Luk Fook Holdings appears well-positioned to continue its glittering trajectory in the global luxury market.
