Geox reports 8.2 percent drop in H1 turnover

Geox S.p.A., has reported consolidated sales in the first half of 414.1 million euros (483.5 million dollars), down 8.2 percent or 7.2 percent at constant forex, compared with the previous year, which the company said were affected by performance in the first quarter, characterised by lower discounted sales and the delayed start to the spring season and the rationalization programme for mono-brand stores. EBITDA amounted to 25.2 million euros (29.4 million dollars), equal to 6.1 percent of sales, compared with 34.7 million euros (40.5 million dollars) in 2017, equal to 7.7 percent of sales. Adjusted EBITDA, the company added, amounted to 27.3 million euros (31.8 million dollars) compared with 41.2 million euros (48 million dollars) in the first half of 2017.

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Commenting on the company’s first half trading, Matteo Mascazzini, Geox’s Chief Executive Officer since February 1, 2018, said in a statement: “In the first half of 2018, the Group continued and strengthened its initiatives to improve margin performance, to implement a lean and more efficient structure and processes, and to control operating costs. We have launched a number of important initiatives as part of an extensive strategic review project, in light of the presentation of the new business plan.”

Review of Geox’s first half performance

Sales generated by wholesale stores, Geox said, representing 46 percent of Group revenues, amounted to 191.2 million euros (223 million dollars), down 4 percent at current forex and 4.6 percent at constant forex. However, the second quarter, the company said, recorded 10.6 percent growth compared with the second quarter of 2017. Sales generated by directly-operated stores, DOS, representing 42 percent of Group revenues, recorded a reduction at 174.4 million euros (203.6 million dollars), down 3.8 percent at current exchange and 2.1 percent at constant forex. Comparable sales generated by directly-operated stores to date reported a decline of 3.7 percent.

Sales generated by the franchising channel, which account for 12 percent of Group revenues, amounted to 48.5 million euros (56.6 million dollars), reporting a decline of 28.5 percent or 28.3 percent at constant forex. Performance in the franchising channel, Geox added, particularly reflects the planned rationalization of the store network in the last quarters, with a net reduction of 62 stores in 2017 and 34 in the first half of 2018 (approximately 20 percent of the entire franchising network) due to closures and conversions into DOS.

Geox’s results across geographies

Sales generated in Italy, amounted to 124.3 million euros (145 million dollars), down 9.3 percent. Sales generated in Europe, amounted to 179.9 million euros (210 million dollars), recording a decline of 9.6 percent. North America recorded a turnover equal to 24.1 million euros (28.1 million dollars), reporting a decline of 15.1 percent or 9.9 percent at constant forex, due to the negative performance of the wholesale channel. The rest of the world recorded a 1.1 percent decline but 2.3 percent rise at constant forex in turnover compared with the first half of 2017. Performance in the wholesale channel was up 3.5 percent.

As of June 30, 2018, the company operated a total of 1,040 Geox Shops, of which 436 DOS. During the first half of 2018, 19 new Geox Shops were opened and 74 were closed.

Picture:Facebook/Geox