IC Group Q2 same-store sales decline by 12.9 percent

For the second quarter, IC Group revenue from continuing operations excluding Saint Tropez amounted to 271 million Danish krone (41.3 million dollars), up 1.1 percent or 3 percent in local currency, driven by Tiger of Sweden's wholesale channel, which reflected the positive effect from the brand's execution of its present strategic business plan. However, revenue from the retail channel decreased primarily driven by the physical stores and the same-store revenue was down by 12.9 percent.

Total earnings growth from the group's core business was driven by Tiger of Sweden, which generated an operating profit of 4 million Danish krone (0.6 million dollars), corresponding to an EBIT margin of 2 percent. The consolidated operating profit excluding Saint Tropez, for the quarter, amounted to 2 million Danish krone compared to 7 million Danish krone last year, corresponding to an EBIT margin of 0.7 percent compared to 2.6 percent. The gross profit declined to 145 million Danish krone (22 million dollars), and the gross margin declined by 10.3 percentage points to 53.5 percent.

Review of IC Group’s first half results

In the first half, revenue decreased by 8.3 percent or 5.7 percent in local currency to 578 million Danish krone (88 million dollars). This reduction, the company said, was driven by the retail channel as well as declined in wholesale revenue. The same-store revenue declined by 15.8 percent.

The gross profit declined to 314 million Danish krone (47.8 million dollars) for H1 corresponding to a gross margin of 54.3 percent compared to 63.5 percent. The operating profit before non-recurring costs declined to 22 million Danish krone (3.3 million dollars), corresponding to an EBIT margin of 3.8 percent. The reported operating profit amounted to 4 million Danish krone corresponding to an EBIT margin of 0.7 percent.

IC Group expects to reports minor reduction in full year revenues

At the beginning of this year, IC Group sold Saint Tropez to DK Company. The company further said that the expectations for the financial year 2018/19 are unchanged and it expects a minor revenue reduction measured in local currency while the EBIT margin is expected at a level of 1 to 2 percent prior to non-recurring costs in respect of the transformation of the group.

For Tiger of Sweden, a minor revenue reduction measured in local currency and a moderate decline in nominal earnings are expected compared to prior outlook of increase in revenue and nominal earnings at the same level as last financial year. The updated expectations for the brand reflect lower anticipated performance in direct-to-consumer channels for the rest of the financial year - retail in particular.

In By Malene Birger, a moderate revenue reduction measured in local currency and a substantial decline in nominal earnings are expected against previous guidance of revenue increase and nominal earnings at the same level as last financial year.

"Central functions", the company added, will be negative as it will be affected negatively by changed allocation principles in respect of costs in the corporate functions as well as idle costs in respect of the head office after the divestment of Peak Performance.

Picture:Facebook/By Malene Birger