- Prachi Singh |
Tom Tailor Group said that despite a slight 1.1 percent decline in sales to 446.3 million euros (523 million dollars) in the first half, due to the clean-up of the product and store portfolios, the earnings situation was noticeably improved. EBITDA increased by about 63 percent to 30.7 million euros (36 million dollars).
"We are making good progress towards our goal of putting the Tom Tailor Group back on a solid foundation," said Heiko Schäfer, CEO of Tom Tailor Holding in a statement, adding, “Our results show without a doubt that our realignment measures are taking hold. Consequently, along with the well advanced RESET program, our focus is now also on the preparation and implementation of growth measures such as the expansion of our online business."
Tom Tailor expects to achieve cost saving target
The company’s first half EBIT improved by 17.3 million euros (20 million dollars) to 11.8 million euros (13.8 million dollars). Hence, the company said that it is well on the way of reaching the two-year cost savings target of 30-40 million euros (35 to 46 million dollars).
In the first half, the Tom Tailor brand achieved 2.9 percent increase in sales across all channels to 306.5 million euros (359 million dollars). This included a 1.7 percent increase for the Tom Tailor Retail segment to 140.2 million euros (164 million dollars), buoyed by the strong second quarter, in which sales were up 2 percent to 75.4 million euros (88 million dollars). Simultaneously, the company added, the number of own stores declined to 462 from the end of 2016 due to the conscious closure of unprofitable locations. EBITDA for the retail segment showed a decrease to 2.7 million euros (3.1 million dollars).
In the first half of the year, sales for Tom Tailor wholesale rose by 3.9 percent to 166.3 million euros (195 million dollars), driven by an 8.3 percent surge in growth in the second quarter to 78.8 million euros (92 million dollars). The wholesale segment contributed 20 million euros (23 million dollars) to the Group EBITDA.
Sales of the Bonita brand were down 8.9 percent in the first half of the year to 139.7 million euros (163 million dollars). In the second quarter, sales showed a 14.7 percent decrease to 73.1 million euros (85 million dollars). The company said, this was due to the reduction of stocks of old goods and the sell-off of inventories in the discontinued Bonita Men line. By contrast, the gross profit margin rose to 70.7 percent in the second quarter due to the successful launch of the new Bonita Women collection. The number of Bonita stores also decreased further to 860 and the brand achieved an increase in EBITDA to 8 million euros (9.3 million dollars), as compared to 4.1 million euros (4.8 million dollars) in the first half of 2016.
Tom Tailor Group reaffirms FY17 forecast
The Tom Tailor Group has confirmed its forecast, which was adjusted in the first quarter, for the current fiscal year, as the company said, assumptions made at the beginning of the year are still valid, and the market trend and the RESET program are expected to continue as before. Consequently, the management expects a slight decline in group sales but a sharp year-on-year increase in reported EBITDA.