Esprit says H1 profit down 74 pct, beats forecast

HONG KONG - Europe-focused retailer Esprit Holdings Ltd posted a 74 percent drop in first-half net profit on Thursday, although the result came in well ahead of forecasts, as the deepening European debt crisis sapped demand.

Esprit's new store in Cologne, Germany - Photo DR

Esprit, whose competitors include Swedish clothing retailer Hennes & Mauritz AB, U.S. group GAP Inc and Spain's Inditex SA, reported a net profit of HK$555 million ($71.57 million) for the six months ended December.

The result beat an average estimate of HK$196 million from three analysts polled by Thomson Reuters and was lower than a net profit of HK$2.14 billion posted a year earlier.

Analyst forecasts ranged from a HK$391 million profit to a HK$5 million loss for the fiscal first half.

Turnover for the period fell 5.6 percent to HK$16.70 billion, from HK$17.69 billion a year earlier.

The fashion group said it would finalise winding down its North American operations by March 31.

Esprit is Asia's No.7 apparel retailer by market value, down from third place a year earlier. Its shares plunged 73 percent in 2011, lagging a 20 percent fall in Hong Kong's benchmark Index.

($1 = 7.7551 Hong Kong dollars) (Reporting by Donny Kwok and Rachel Lee; Editing by Chris Lewis)