Ahler Group's premium brands post positive sales growth in Q3

Ahlers has announced that sales revenues of continued activities remained stable at 179.4 million euros (212 million dollars) during the third quarter of this fiscal year. The company added that the biggest contribution to this robust revenue trend was made by Pioneer Authentic Jeans as well as the Baldessarini and Pierre Cardin premium brands. The activities of Gin Tonic and business with the last remaining private label customer were discontinued in the previous year, which resulted in a reduction of 4.8 million euros (5.6 million dollars) in sales revenues in the reporting period. The group’s total revenues in the nine-month period declined by 2.6 percent from to 179.7 million euros (212.3 million dollars).

Commenting on the third quarter trading, Stella A. Ahlers, CEO of Ahlers AG said in a media statement: “For some years, Germany’s physical clothing retail stores have been confronted with frequency drops and changed purchasing behavior. In this difficult environment, we have responded to the retail trade’s changing requirements. Both – the growing wholesale and e-commerce business – confirm our strategy to focus on these sales channels.”

Highlights of the Ahlers’ Q3 results

Sales revenues of the three premium brands – Baldessarini, Pierre Cardin and Otto Kern – increased by 0.3 percent or 0.4 million euros (0.47 million dollars) to 126.1 million euros (149 million dollars) in the reporting period. The company said, both Baldessarini and Pierre Cardin contributed to this positive performance. Baldessarini recorded strong growth in Germany of 4.8 percent and Pierre Cardin increased its revenues in Poland and the Baltic states by 3.8 percent together as well as in Russia and Ukraine by 9.1 percent. The premium segment’s share in total revenues climbed from 68 percent in the previous year to 70 percent.

The continued brands in the jeans, casual & workwear segment – Pioneer Authentic Jeans, Pionier Jeans & Casuals, Pionier Workwear and Jupiter – increased their revenues in the first nine months adjusted for the effects of the later deliveries and the shifts in business. At 53.3 million euros (63 million dollars), revenues from continued activities in non-adjusted terms were 0.7 percent below the previous year’s 53.7 million euros (63.5 million dollars). Pioneer Authentic Jeans and Pionier Jeans & Casuals recorded positive growth and boosted their revenues by 5.9 percent, both in Germany and in the international markets.

E-commerce revenues remained stable in Q1 2016/17, they increased by 13 percent in Q2 and by as much as 24 percent in the third quarter. This is equivalent to an average growth rate of 11 percent for the first nine months of the fiscal year 2016/17. The company’s own retail segment recorded an increase by 1.7 percent during the same period. The Retail segment’s share in total revenues rose moderately to 12.6 percent from 12.1 percent last year.

Due to the non-recurrence of low-margin business and reduced discounts, the gross profit margin climbed by 0.8 percentage points from 50.8 percent to 51.6 percent. As the improved gross profit margin partly offset the effect of lower revenues (-2.6 percent) on gross profit, the latter declined by 1.1 percent. The effect of revenues on gross profit and the increased operating expenses sent EBITDA falling by 12.8 percent 1.6 million euros (1.8 million dollars) to 10.9 million euros (12.8 million dollars).

Ahlers confirms revenue growth in Q4

The management board projects growing revenues for the fourth quarter of 2017, as sales of autumn/winter merchandise have shifted from the third quarter to the fourth quarter. As a result, the board expects the continued brands to grow by about 2 percent in the full year 2016/17 largely offset the shortfall in revenues resulting from the discontinued activities, with total revenues in fiscal 2016/17 expected to be more or less stable.

The board has confirmed the earnings forecast published in the annual report of the previous year, according to which consolidated earnings will grow moderately in FY 2016/17. In anticipation of a higher gross profit margin, it expects, more or less stable revenues should lead to a largely stable gross profit.