SINGAPORE (May 25): The Hour Glass Group, the retailer of specialist luxury watches, said FY17 earnings fell 7% to $49.6 million from a year ago “in one of the most challenging conditions in recent years”.

Earnings per share fell to 6.91 cents from 7.42 cents.

Revenue for the three months ended March dipped 2% to $696.1 million amid the weak economic backdrop, sluggish consumer sentiment and intensified competition.

Gross margins ended at 22.7% for FY17, compared with 23.7% for FY16.

Despite the challenging external environment, Hour Glass says it continued to bolster its financial position, a result of efficient processes of marketing, merchandising and inventory management.

The group’s consolidated net assets amounted to $478.5 million with cash and cash equivalents at $124.8 million – both at historic highs for the group.

Looking ahead, Hour Glass says operating conditions continue to remain challenging in key markets like Singapore and Hong Kong, where visitor arrivals remain subdued.

“Discretionary consumption for luxury and specialty watches remains soft while a glut of inventory continues to persist in the supply chain. These will impact the market for luxury timepieces,” adds the group.

Shares of Hour Glass closed at 69 cents, up 8.7% year to date.