HONG KONG, March 25 (Reuters) - Li & Fung (0494.HK), a leading global exporter and distributor, said on Wednesday March 25 its net profit for the second half of 2008 fell 41 percent, lagging analysts' forecasts, as it was hit by weak global markets and one-off costs.

Liz Clairborne Spring 2009

"Apart from the overall weak market sentiment, the bottomline was also affected by a number of one-time events, including restructuring costs in many of the high-cost cities," the Hong Kong-based consumer goods exporter, which supplies U.S. retailers such as Wal-Mart (WMT.N) and Target (TGT.N), said in a statement.

It also cited the time-lag factor created by several new key outsourcing deals, which require start-up costs but require time before major revenue can start to flow, for the weak performance.

The company posted a profit of HK$1.18 billion ($159 million) for July-December, compared with HK$2.01 billion in the year-ago period.

The consensus forecast for the second half was for profit of HK$1.82 billion, according to 13 analysts polled by Reuters Estimates.

Core operating profit margin decreased to 2.79 percent in 2008 from 3.45 percent in 2007, the company said.

Retailers have been battered as a recession spreads around the world, prompting consumers to curb their spending.

Target Corp (TGT.N) reported a worse-than-expected drop in quarterly profit, with same-store sales declining in February.

Still, there are some bright sparks. Wal-Mart, the world's largest retailer, reported a higher-than-expected rise in February same-store sales and posted a fourth-quarter profit that beat forecasts.

Analysts say Li & Fung is one of the few consumer companies having a positive earnings outlook because stock clearance will have gone far enough for retailers to refill shelves again in the months ahead, boosting suppliers.

BNP said in a recent research note that Li & Fung registered mid-teens year-on-year percentage growth in January-February order book shipments, citing U.S. retailer restocking rather than a genuine recovery in demand.

Last month, Li & Fung agreed to pay $83 million to become fashion company Liz Claiborne Inc's (LIZ.N) primary global sourcing agent for apparel and accessories.

Shares of Li & Fung have risen almost 50 percent so far this year, after plunging 43 percent in the second half of 2008 and underperforming a 35 percent fall in the benchmark index .HSI. (US$1=HK$7.8) (Reporting by Donny Kwok; Editing by Dhara Ranasinghe and Muralikumar Anantharaman)