HSBC Global Research lowered its target price for Esprit Holdings (00330) to HK$1.3 from HK$2.1 and maintained its "hold" rating.
The research house said Esprit's last quarterly update (for 3Q FY2019, or quarter ended
March 2019) showed some improved trends. Nevertheless, HSBC believes it's still too early to judge whether a turnaround is imminent.
HSBC believes the path to turn Esprit around has been lengthy, rocky and difficult, and with no strong sign of success. Looking forward, it continues to see some challenges, including (1) The rejuvenation of its brand image, (2) How to clearly position the brand and reconnect with its target customers, and (3) How the above-mentioned points can be achieved while the company focuses on streamlining costs, downscaling the business, and optimizing processes.
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