A second-quarter retreat in gold prices from their peak created a rare window for consumer spending at Chow Tai Fook.
On July 23, Chow Tai Fook Jewellery Group released its unaudited operational data for the three months ending June 30, 2026, the first quarter of its 2027 fiscal year.
During the reporting period, the group's retail value grew 15.1% year-on-year. Mainland China saw a 10.7% increase, accounting for 83.6% of the group's total retail value. Markets in Hong Kong, Macau, and other regions recorded a 44.8% surge.
Same-store sales for both directly-operated stores and franchise outlets in mainland China rose by 19.6% and 15.7%, respectively, while the Hong Kong and Macau market posted a 41.7% same-store sales gain.
The most immediate shift this quarter came from gold prices. In early 2026, international gold prices briefly hit an all-time high in January, but then entered a correction phase.
Following a steep decline in June, gold prices denominated in US dollars and yuan fell by 8% and 10% cumulatively in the first half of the year, respectively. After a rapid earlier rally, the interim pullback in gold prices lowered the restocking threshold for both consumers and the supply chain.
Data from the World Gold Council shows that gold withdrawals from the Shanghai Gold Exchange surged 36% month-on-month in June to 87 tonnes, driven mainly by opportunistic replenishment from the supply chain and bargain hunting by individual investors as prices dropped.
However, since gold prices remain significantly above year-ago levels, overall gold jewellery consumption remains weak.
This quarter, same-store sales volume at Chow Tai Fook's directly-operated mainland stores fell 5.2% year-on-year. The company's focus on fixed-price jewellery underperformed compared to weight-based gold, slowing its brand transformation and product restructuring efforts.
During the period, same-store sales of fixed-price jewellery on the mainland declined 1%, while retail value fell 8.2%, shrinking its share of total retail value from 34% to 29%.
Some new products still contributed incremental growth. The "Wanxiang" series launched by Chow Tai Fook in April achieved a retail value exceeding HK$870 million in its first quarter, surpassing management expectations. In June, the company introduced the "Dongfang Nichang Chinese Couture" high-end jewellery collection.
The group also added four new high-end image stores at premium shopping malls such as Changsha International Finance Center and Nanjing Deji Plaza, bringing the total number of such stores on the mainland to 12.
Chow Tai Fook continues to downsize its traditional store network. In this quarter, it opened 14 new Chow Tai Fook jewellery retail points on the mainland while closing 272, resulting in a net reduction of 258 locations.
As of the end of June, the number of Chow Tai Fook jewellery retail points on the mainland had fallen to 5,047, with 69.4% of them being franchise stores.
The retreat in gold prices has temporarily eased Chow Tai Fook's sales pressure, but it has also redirected growth back toward weight-based gold. Whether this sales recovery can translate into further profit margin improvement still awaits confirmation from upcoming financial reports.
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