Barclays slightly lowered the target price of New World Department Store (00825-HK) from 5.30 yuan to 5.20 yuan, with a rating of "neutral".

Barclays reported that the full-year performance of New World Department Store was in line with expectations, but believed that management challenged the guidelines of same-store sales growth of 13-14%, commission rate stable at 18.3-18.5% and direct sales gross profit margin of 15.4-15.6% in the new fiscal year.

The report pointed out that the annual profit of New World Department Store was 608 million yuan, or 0.36 yuan per share, in line with expectations. Excluding the one-time sale income of 34 million yuan, the recurrent profit increased by 10.3 percent to 561 million yuan, or 0.33 yuan per share.

Barclays has reservations about management's guidance on same-store sales growth of 13-14 per cent in the new fiscal year, as July-August growth is only below the above guidance, and store reshaping will be less helpful in the new fiscal year. The bank expects a setback in its same-store sales growth to put pressure on profit margins.

Barclays slightly adjusted its New World target price to 5.2 yuan, equivalent to 14 times forecast 2013 earnings, in line with the company's 14% compound earnings growth forecast for fiscal year 14.