Daphne International Holdings Limited announced unaudited sales results for the fourth quarter and full year ended December 31, 2013. The company reported same store sales growth rate down 5.4% for the fourth quarter of 2013. This is compared against 2.0% growth for the same period last year. Sales performance in the fourth quarter of 2013 was adversely affected overall by a combination of softer market due to a slowdown in consumers' spending; Unanticipated warm weather conditions in October and November; Keen competition; and higher proportion of newly trained frontline staff.

The company reported same store sales growth rate down 10.4% for the full year of 2013 against up 9% of 2012.

Based on a preliminary review of the unaudited consolidated management accounts and the information currently available, the board announced that, the profit attributable to owners of the company for the year ended 31 December 2013 is expected to have a significant decline and resulted in a low single-digit net margin, as compared to that of last year. The decline in profit of the group is mainly due to: sales almost flat; Negative same store sales growth; Lower gross profit margin; A significant increase in inventory provision; Significant negative operating leverage, especially during the second half of 2013; and an additional increase in impairment loss from the closure of non-performing stores.