Sharp decline in wholesale impacts Geox results

Geox reported first quarter sales of 193.6 million euros, down 13.5 percent or 11.7 percent at constant exchange rates due to the performance of the wholesale channel and franchising, partially offset by the positive trend of the digital DOS channel.

Considering the uncertain geopolitical and macroeconomic short-term scenario, the company expects operating margin for the full year to increase 50 bps, while revenue is forecasted to decline mid-single digit compared to 2023.

Commenting on the first quarter trading, the company’s chief executive officer Enrico Mistron said in a statement: “The first quarter of 2024 has proven to be extremely challenging and complex. The persistence of the complexity and uncertainty observed in all our major reference markets in these first months of 2024 lead us to maintain a prudent and focused approach to the growth of the most profitable markets, the streamlining of processes, and the optimization of cost structures.”

Geox Q1 wholesale sales decrease

Wholesale, which accounted for 55.2 percent of the group's sales, amounted to 106.8 million euros, down 21.6 percent at current and 19.7 percent at constant exchange rates.

Franchising channel sales, accounting for 8.4 percent of the group's sales, amounted to 16.2 million euros, a decrease of 21.4 percent affected by the reduction in the number of stores, associated with negative like-for-like performance of 2.5 percent. Stores under franchising agreement decreased from 284 stores in March 2023 to 263 in March 2024.

The sales from physical and digital DOS, that represent 36.4 percent of the total group's sales, amounted to 70.6 million euros, up 5.4 percent at current exchange and 6.9 percent at constant exchange rates. Comparable sales (LFL) from physical stores witnessed a growth of 4.4 percent. Sales generated through DOS digital channels recorded an increase of 41.9 percent. The number of DOS decreased from 291 stores in March 2023 to 251 in March 2024.

Geox posts revenue decline in Italy and other markets

The sales recorded in Italy accounted for 28.4 percent of the group's sales, decreased by 13.2 percent to 55 million euros driven by 23.8 percent drop in wholesale channel and 31.8 percent in franchisee shops, partially offset by the 0.9 percent increase recorded by physical and 39.1 percent growth recorded by digital DOS.

Sales generated in Europe representing 43.4 percent of the total sales decreased 10.3 percent to 84.1 million euros driven by negative performances in the DACH region (Germany, Austria, and Switzerland), particularly in the wholesale channel. Direct stores (physical and digital) reported LFL sales growth of 16 percent, primarily driven by the good performance of the physical store in France and by the digital stores. Franchisees experienced negative performances of approximately 10.3 percent.

North America recorded revenue of 6 million euros, down by 20.8 percent or 20 percent at constant exchange, influenced by a 33.2 percent decline in the wholesale channel. The DOS channel remained substantially flat, with the positive performances of the digital stores offsetting the decline in the physical stores.

Other countries reported a revenue decline of 17.9 percent or 10.7 percent at constant exchange. In the Middle East region, revenue experienced a significant decrease, due to geopolitical tensions and the outbreak of the Israeli-Palestinian conflict.

Footwear representing 89.9 percent of consolidated sales, amounted to 174.1 million euros, with a decrease of 14 percent or 12.5 percent at constant exchange rates, apparel accounting for 10.1 percent of total sales amounted to 19.5 million euros; down 8.5 percent at current exchange and 3.6 percent at constant exchange rates.