Tom Tailor Group's sales drop but EBITDA improves 66.6 percent

The Tom Tailor Group has said that due to the consistent implementation of measures to optimise costs and processes under its ‘RESET’ programme, EBITDA rose in the nine-month period by 66.6 percent to 52.8 million euros (61 million dollars) and group EBIT improved from negative 4 million euros (4.6 million dollars) to 26.1 million euros (30 million dollars). The gross profit margin improved 0.8 percentage points to 56.7 percent against 55.9 percent in the prior year period. Group sales, the company added, however declined 1.3 percent to 686.2 million euros (796 million dollars) due to the discontinuation of products, countries and stores.

"Our results demonstrate that we have set many important points for a sustainably profitable development of the Tom Tailor Group in these past several months," said Dr. Heiko Schäfer, Chief Executive Officer of Tom Tailor Holding in a statement, adding, "We are well on the way to achieving the goals we set ourselves for 2017 with our RESET programme and in some areas we are close to surpassing them.

Performance highlights of Tom Tailor’s retail segments

In the first nine months of the year, Tom Tailor Retail was able to increase its turnover by 1.1 percent to 213.6 million euros (247 million dollars) and the gross profit by 5 percent to 123.5 million euros (143 million dollars).

In the wholesale area, sales grew period by 2.9 percent to 270.7 million euros (314 million dollars) and the gross profit by 3.5 percent to 127.9 million euros (148 million dollars). EBITDA in the reference period even rose by 53.6 percent to 40.4 million euros (46 million dollars).

In the first nine months, the company’s Bonita brand recorded a decline in sales of 8.6 percent to 201.9 million euros (234 million dollars), while EBITDA in the reporting period increased noticeably to stand at 10.5 million euros (12 million dollars). In the third quarter alone, the gross margin rose to 69.9 percent. At the same time, the number of Bonita stores was reduced to 830 against 982 stores in Q3 2016.

Tom Tailor declares positive outlook for FY17

For the remainder of the business year, the company has confirmed its forecast as adjusted in the first quarter as a result and assumes there will be a sharp year-on-year increase in reported EBITDA compared with the prior year. Because of the discontinuation of products, countries and branches under the RESET programme as well as the licensing of the kids division, the management still expects a lower group turnover for the benefit of operating profitability.

"The growing profitability of our operating business shows that with RESET we have been turning at the right screws so far. Even if 2017 remains a year of transformation, we can ascertain that the measures taken already show visible success and we have taken the right direction," added Thomas Dressendoerfer, Chief Financial Officer of Tom Tailor Holding.

Picture:Tom Tailor website