Check out this possible string of losses for Esprit

7% revenue loss, 14% profit drop.

According to Barclays Research, following yesterday’s profit warning, it cut its FY13-14 earnings forecasts for Esprit.

Here's more from Barclays Research:

We also lower our PT to HK$9 (from HK$13) – now based on 1x book value, as FY13 will likely be at a net loss – to account for the earnings cuts and dilution following the rights issue.

We believe FY13E will be a write-off, and expect the earliest data point will not be until FY14E. We reiterate our UW rating. Key upside risk to our call is a quicker-than-expected turnaround in the business in Europe.

We now look for a revenue loss of 7% (1Q FY13 was down 20%) vs our earlier estimate of 4% growth. We slash FY13E gross margins to 50.0% from 51.5% previously. Consequently, our gross profit estimates decline by 14%.

We believe there could be further downside to gross margins. While we optimistically assume flat overheads y/y (unchanged staff, rentals and logistics costs y/y), we believe the risk to this is on the downside.

We expect Esprit to post an operating and net loss for FY13. We cut our FY13 net profit forecast from HK$811mn to a loss of HK$1554mn, and our FY14E earnings estimates by 89% to HK$141mn.

We also adjust for a higher number of shares outstanding following the recent rights issue in early November as well as for higher-than-before interest income from a larger consequent cash pile.