- Prachi Singh |
Gross revenue in the fourth quarter totalled 335.5 million Brazilian real (64.4 million dollars) at Restoque Comércio e Confecções de Roupas S.A., down 12.6 percent, which the company said was impacted by the measures adopted by the company to eliminate channel conflicts and reinforce the positioning of its brands, strengthening the bases for sustainable growth. Gross profit for the quarter was 170 million Brazilian real (32.6 million dollars), down 9 percent, with a gross margin of 66 percent, up 3.1 pp and in the year to date period, the company reached a gross margin of 65.1 percent, up 1.4 pp. Accounting EBITDA reached 137.1 million Brazilian real (26.3 million dollars), with a 53.2 percent margin. The company reported a loss of 169 million Brazilian real against the profit of 45 million Brazilian real in the fourth quarter of 2018.
There was a 9.4 percent drop in same store sales (SSS), while sales of the brands Dudalina, Le Lis Blanc and Bo.Bô showed a decrease of 13.7 percent, 13.7 percent and 8.6 percent, respectively. However, the company added, all brands had a positive performance during Christmas in December, totalling 6.8 percent. Despite the impact on the reduction of promotional sales during November, Restoque said, John John achieved stability in SSS and an increase of 3.4 percent in sales per m2, Rosa Chá achieved SSS rise of 33.1 percent and 38.1 percent in sales per m2. Outlets channel comprising the network of 31 physical outlet stores under the Estoque brand recorded an SSS decline of 5.8 percent and an increase in the average ticket of 6.9 percent.
Review of Restoque’s Q4 results
The sales volume for third party online channels has been drastically reduced, as a measure to favour the growth of the company’s own online channel and improve the positioning of brands. The company went from a base of 257 stores at the end of fourth quarter of 2018 to 255 at the end of last year’s fourth quarter.
The company’s wholesale channel decreased sales by 54.1 percent, with a loss of 207.9 million Brazilian real (39.9 million dollars) in revenue in 2019, which Restoque said was caused by the deliberate reduction in sales to third party online channels. Excluding this effect, sales to multi-brand physical store customers grew by 2.7 percent, with a 9.5 percent growth in John John sales, up 16.7 percent in the fourth quarter and 5.6 percent in Dudalina brands.
Online channel sales totalled 16.7 million Brazilian real (3.2 million dollars), representing 4.8 percent of the company’s total revenue in the period and an increase of 137.2 percent over 4Q18.