UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF THE

SECURITIES EXCHANGE ACT OF 1934

For the month of June 2019

Commission File Number 001-35715

KBS FASHION GROUP LIMITED

(Translation of registrant’s name into English)

Xin Fengge Building

Yupu Industrial Park

Shishi City, Fujian Province 362700

People’s Republic of China

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

KBS Fashion Group Limited (the “Company”) today announced its unaudited financial results for the three months ended March 31, 2019.

The Company’s press release regarding the foregoing matter is attached hereto as Exhibit 99.1.

Exhibit 99.1 to this Report on Form 6-K shall be incorporated by reference into the Registration Statement on Form S-8 (File No. 333-229046) filed with the Securities and Exchange Commission on December 27, 2018, to the extent not superseded by information subsequently filed or furnished (to the extent we expressly state that we incorporate such furnished information by reference) by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, in each case as amended.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EXHIBIT INDEX

3

Exhibit 99.1

KBS Fashion Group Limited Reports Robust First Quarter 2019

Financial Results

-Q1 gross profit increased 48.3% YoY to $1.61 million

- Q1 IFRS net income achieved $0.3 million, compared to IFRS net loss of $1.90 million

SHISHI, China, June 3rd, 2019 -- KBS Fashion Group Limited ("KBS" or the "Company") (NASDAQ: KBSF), a leading fully-integrated casual menswear company in China, today announced its unaudited financial results for the first quarter ended March 31, 2019.

First quarter of 2019 Financial Highlights

Mr. Keyan Yan, Chief Executive Officer of the Company commented, "we are very pleased with our operating and financial results for the first quarter, which demonstrated strong profitability given the first quarter being a slow season. The management team is working diligently to keep strong momentum by continuing to improve our operational efficiencies and increase our sales from different channels. Looking forward to the remaining of 2019, we are excited about the sales potential from the recently signed contract and integration of our potential acquisition of Tribe which is expected to put us in a prominent position in the smart clothe technology market. We are confident about our ability to outperform in 2019 and beyond.”

First quarter of 2019 Financial Results Analysis

Revenues

Revenues from the Company's distribution network decreased by $0.87 million, or 22.3%, to $3.04 million for the first quarter of 2019 from $3.91 million for the same period of last year. Distribution network contributed 65.9% of total revenues for the first quarter of 2019, compared to 87.8% for the same period of last year. The Company's distributor network consisted of 11 distributors in 10 provinces during the first quarter of 2019, compared to 14 distributors in 12 provinces during the same period of last year. Most of these distributors, either directly or through their sub-distributors, operate KBS-branded stores. Some wholesale distributors sold the products to multi-branded stores and online stores. As of March 31, 2019, there were 32 KBS-branded franchise stores operated by our distributors and sub-distributors, primarily in second and third tier cities. KBS products distributed to the fourth and fifth tier cities are primarily sold in multi-branded department stores and online shops. As a comparison, we had 39 KBS-branded franchise stores operated by our distributors and sub-distributors as of March 31, 2018. 

The following table lists by regions the number of retail stores operated by distributors and sub-distributors as of March 31, 2019: 

Revenues from corporate store sales increased by $0.02 million, or 13.3%, to $0.17 million for the first quarter of 2019 from $0.15 million for the same period of last year. We currently have one corporate store operated directly by us, sales of which accounted for 3.8% of total revenues for the first quarter of 2019, compared to 5.5% for the same period of last year. The increase in corporate store sales was due to the overall improvement on products this year.

Revenues from OEM sales increased by $1.00 million, or 247%, to $1.40 million for the first quarter of 2019 from $0.4 million for the same period of last year. OEM accounted for 30% of total revenues for the first quarter of 2019, compared to 7% for the same period of last year. The OEM segment is comprised of products that are designed by the customers and manufactured by the Company. The increase in revenues from OEM sales was primarily due to the increased orders from our two major customers: Hangzhou Ziyin and Hangzhou Yiyuan

Cost of Sales and Gross Profit

Total cost of sales decreased by $0.37 million, 11.0%, to $3.00 million for the first quarter of 2019 from $3.38 million for the same period of last year. The decrease in cost of sales was primarily due to higher products pricing strategy this year comparing same period of last year.

Total gross profit increased by $0.52 million, or 48.3%, to $1.61 million for the first quarter of 2019 from $1.09 million for the same period of last year. Gross profits for distribution network, corporate stores and OEM were $0.97 million, $0.07 million, and $0.58 million, respectively, for the first quarter of 2018, compared to $0.89 million, $0.06 million, and $0.14 million, respectively, for the same period of last year. 

Overall gross margin was 34.9% for the first quarter of 2019, compared to 24.4% for the same period of last year. On a segment basis, gross margins for distribution network, corporate stores and OEM were 31.9%, 37.4%, and 41.2%, respectively, for the first quarter of 2019, compared to 22.9%, 39.0%, and 33.7%, respectively, for the same period of last year. The increase in overall gross margin was due to the rolling out of our new products. Our products of new styles have gained additional advantages in pricing which helped increase our gross margin during the first quarter of 2019. 

Operating Expenses and Operating Income (Loss)

Distribution and selling expenses decreased by $0.43 million, or 59.1%, to $0.30 million for the first quarter of 2019 from $0.73 million for the same period of last year. The decrease in distribution and selling expenses was mainly due to the Company’s new cost effective business strategy, resulting in reduced cost in marketing and advertising as well as the labor. Additionally, the Company adjusted the allowance standard for the dealer rental allowance to save the cost.

Administrative expenses decreased by $1.53 million, or 63.8%, to $0.87 million for the first quarter of 2019 from $2.40 million for same period of last year. The decrease in administrative expenses was mainly due to the Company’s new business strategy plan resulting in reduced labor salary, R&D expenses, and outsourced marketing team expanse. The depreciation expense was reduced relatively after the impairment of our Anhui facility at the end of 2018.

Other operating expenses, including other income and other gains and loss, totaled $95,314 for the first quarter of 2019, compared to $30,354 for the same period of last year. Operating profit was $0.54 million for the first quarter of 2019, compared to operating loss of $2.01 million for the same period of last year. Operating profit margin was 11.8% for the first quarter of 2019, compared to operating loss margin of 45.0% for the same period of last year.

Income (Loss) before Income Taxes

Profit before income taxes was $0.31 million for the first quarter of 2019, compared to loss before taxes of $2.04 million for the same period of last year. 

Income tax expense was $0.22 million for the first quarter of 2019, compared to income tax gain of $0.14 million for the same period of last year. 

About KBS Fashion Group Limited

Headquartered in Shishi, China, KBS Fashion Group Limited, through its subsidiaries, is engaged in the business of designing, manufacturing, selling and distributing casual menswear through a network of 33 KBS branded stores (as of March 31, 2019) and over a number of multi-brand stores. To learn more about the Company, please visit its corporate website at www.kbsfashion.com.

Safe Harbor Statement

This press release may contain certain “forward-looking statements” relating to the business of KBS Fashion Group Limited, and its subsidiary companies. All statements, other than statements of historical fact included herein, are “forward-looking statements” in nature within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, often identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

For further information, please contact:

Lisa Tu
Chief Financial Officer
T: +86 158-5972-2469
E: lingsantu@hotmail.com

KBS Fashion Group Limited

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(LOSS) 

(Stated in US dollars)

KBS Fashion Group Limited

Unaudited Consolidated Statements of Financial Position

For the Period ended March 31, 2019 (Stated in US dollars)

KBS Fashion Group Limited

Unaudited Consolidated Statements of Cash Flow

For the three Months ended March 31, 2019 and 2018

USD

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