Min­i­mum Wage hike in Viet­nam Chil­dren’s place net sales up 0.6% to $373.6 mn in Q2 2017

Perfect Sourcing - - International News -

The forth­com­ing spikes in the re­gion-based min­i­mum wages are ex­pected to im­prove work­ers’ in­comes but pro­duc­tion costs in labour-in­ten­sive in­dus­tries will cer­tainly pick up. The Min­istry of Labour, has pro­posed a wage in­crease of 6.5%, or VND 180,000-230,000 a month, which would go into force early next year. This is also what the Na­tional Wage Coun­cil, and rep­re­sen­ta­tives of em­ploy­ers and em­ploy­ees have agreed upon af­ter three rounds of ne­go­ti­a­tions. The cur­rent in­fla­tion rate of 4-4.5% is taken into ac­count to guar­an­tee a real wage rise for work­ers and la­bor pro­duc­tiv­ity growth of 2-2.5% in a bid to meet 92-96% of their min­i­mum liv­ing needs, ac­cord­ing to the min­istry. Given the 6.5% rise, pro­duc­tion costs might move up 0.55-0.6% but the in­crease could be 1.15-1.2% in labour-in­ten­sive in­dus­tries like tex­tile-gar­ment and leather-footwear. In ad­di­tion, the Gov­ern­ment has pro­posed the Na­tional As­sem­bly Stand­ing Com­mit­tee lower the rate of the un­em­ploy­ment in­sur­ance fund for em­ploy­ees by 0.5%. Ac­cord­ing to Viet­nam Tex­tile and Ap­parel As­so­ci­a­tion the 6.5% pay raise would make life more dif­fi­cult for com­pa­nies in the sec­tor. They would be com­pelled to cut pro­duc­tion costs, im­prove pro­duc­tiv­ity, and in­vest in new tech­nolo­gies to use less labour.

The Chil­dren’s Place Inc, the largest pure­play chil­dren’s spe­cialty ap­parel re­tailer in North Amer­ica, has an­nounced that its net sales in­creased 0.6 per cent to $373.6 mil­lion in the sec­ond quar­ter of 2017. Its com­pa­ra­ble re­tail sales in­creased 3.1 per cent in Q2 2017, and gross profit was $128.4 mil­lion, com­pared to $123.9 mil­lion in Q2 of 2016.

This $0.87 in­crease in ad­justed net in­come per di­luted share in­cludes a $0.68 ben­e­fit re­sult­ing from the new ac­count­ing rules for the in­come tax im­pact on share-based com­pen­sa­tion.

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