Tom Tailor expects to post sharp rise in FY17 EBITDA

Confirming preliminary figures published on February 21, 2017, the Tom Tailor Group said that in 2017, the company’s main priority will be on implementing the measures from the RESET cost and process optimization program. In addition to store closures and the departure from some markets, it includes the ongoing optimization of internal structures and processes. The company expects positive effects of the realignment to become visible over the course of the current year resulting in a sharp rise in reported EBITDA in 2017.

"After setting a new course in 2016, we are now fully concentrating on our healthy core business. The initial successes demonstrate that we are on the right track. At the same time we are aware that we still have quite a way to go. The resources released by the RESET program will be used in 2017 mainly to update the brand profiles and push ahead with the digitalization campaign,” said Heiko Schäfer, the CEO of Tom Tailor Holding in a statement.

Tom Tailor expects slight growth for 2017

For the 2017 fiscal year the Executive Board of the company is expecting a slight year-on-year rise in group sales, attributable to the Tom Tailor umbrella brand. The company added, as the non-recurrent and mostly non-cash expenses resulting from the RESET program were mainly absorbed in the fiscal year under review.

In the 2016 fiscal year, the group increased its sales by 1.3 percent to 968.5 million euros (1,047 million dollars), while EBITDA amounted to 10.3 million euros (11 million dollars) against 67.6 million euros (73 million dollars) in the previous year. The company said, due to RESET, the gross profit margin, at 54.5 percent, was slightly lower than the previous year's level.

Tom Tailor brand sales rose 5.6 percent

Sales for the Tom Tailor umbrella brand rose by 5.6 percent to 665.5 million euros (719 million dollars) and the brand’s wholesale business achieved a 3.2 percent increase in sales to 351.9 million euros (380 million dollars). As a result, the company said, this segment contributed around 36 percent of consolidated sales.

The reported EBITDA of the segment was down by 4.5 million euros (4.8 million dollars) to 24.7 million euros (26.7 million dollars). The gross profit margin, however improved, increasing from 45 percent to 46.4 percent, mainly due to improved pricing and fewer price promotions.

The brand's retail segment experienced an increase of 8.5 percent in sales as a result of expansion, while reported EBITDA in this segment for the past fiscal year amounted to 8.2 million euros (8.8 million dollars) against 20.3 million euros (21 million dollars).

The segment sales of the Bonita brand decreased by 7 percent to 303 million euros (327 million dollars). Tom Tailor Group said, the brand made good progress in pruning the store portfolio. The number of Bonita stores decreased by 76 over the course of the year to 950 locations. The reported EBITDA of the segment decreased to 22.6 million euros (24 million dollars). The adjusted gross margin of 67.9 percent was higher than in the previous year due to a decrease in price promotions and improved product pricing.

Picture:Tom Tailor website