Zuoan Fashion (NYSE:ZA) reports Distributor sales fell 20.7% to RMB299.9M in Q3.
Self-operated direct store sales declined 45.45% to RMB1.2M.
Gross margin rate dropped 1270 bps to 28.9% primarily due to lower wholesale pricing offered to the company's distributors as well as decreased pricing at the retail level.
Store count -271 Y/Y to 803.
Q4 Guidance: Revenue: RMB190.0M to RMB210.0M ($31.0M to $34.2M); Gross margin rate: ~21.0% to 23.0%; Net loss: ~RMB2.4M to RMB2.8M ($0.4M to $0.5M); EPS Basic & Diluted: RMB0.02 ($0.004) to RMB0.03 ($0.004), equivalent to RMB0.09 ($0.01) to RMB0.10 ($0.02) per ADS.