Li & Fung says the worst is behind it after first-half profits dropped 70 per cent, although its full-year outlook is clouded by poor visibility on shipments in the US and the slowdown in China, where it has been building up its distribution business, writes Paul J Davies.
The supplier to Walmart and Target stores has been battling to turn round its US distribution business after it identified a series of problems late last year that led it to replace senior management, discontinue businesses and focus on cutting costs.
The company’s profits attributable to shareholders after tax were down to $96m in the first half, versus $312m in the same period last year. This result was far behind the $150m consensus of expectations among analysts, according to a Reuters poll.