Given what Amazon is doing and e-commerce / ommichannel immediacy, is Li & Fung's asset light supply chain model out-dated to meet demands?
HK's Li & Fung 2015 profit down, but beats forecast
That compared with an average forecast of $413.2 million by 10 analysts polled by Reuters.
Li & Fung, which supplies to companies like Kohl's Corp and Wal-Mart Stores Inc, said core operating profit fell 15.2 percent to $512 million.
Revenue fell to $18.8 billion from $19.3 billion a year ago, which was the biggest company by revenue for 2014 in Asia pacific in "Textiles & Apparel" industry.
Textile companies in China are expected to post a 12-month forward revenue growth of 23 percent, the highest expected increase in the Asia-Pacific region in the "Textile & Apparel" sector, according to Thomson Reuters StarMine SmartEstimates, which emphasizes on recent forecasts by top-rated analysts.
Li & Fung has refocused on its core asset-light supply-chain business following the sale of its loss-making brand-licensing and distribution business in 2014, helping it boost free cash flow and better control operating costs.
The company, with a market value of about $5.3 billion, posted a 34 percent rise in January-June profit last year at $149 million.
Analysts were concerned about inventory build-up at retailer level as inventories grew faster than sales growth in recent quarters. They worried that Li & Fung's turnover would be affected as U.S. retailers focus on resolving high inventory levels. ($1 = 7.7606 Hong Kong dollars) (Reporting by Donny Kwok and Meg Shen in Hong Kong; additional reporting by Tripti Kalro in Bangalore; Editing by Gopakumar Warrier)