Ahlers reports 17 percent drop in Q1 earnings

Ahlers has reported 1.5 percent rise in adjusted sales revenue in the first quarter. The company expects stable sales revenues and slightly increasing earnings for the full year. Consolidated earnings after taxes declined by 0.6 million euros (0.63 million dollars) or 17 percent from 3.5 million euros (3.7 million dollars) to 2.9 million euros (3 million dollars) in the first three months of 2016/17.

“We are pleased about this positive trend driven by the good performance of the Baldessarini, Pierre Cardin und Pioneer Authentic Jeans brands in a difficult market”, said Stella A. Ahlers, CEO of Ahlers AG in a media release.

Ahlers revenues decline due to seasonal shift

While revenues at Pierre Cardin, Baldessarini and Pioneer Authentic Jeans continued to grow moderately in a strongly declining market, the company said, revenues were down by 3.1 million euros (3.2 million dollars) due to discontinued activities and a shift in sales into Q2 2017.

The company said that the first three months of 2016/17 were influenced by a shift in sales revenues from the first to the second quarter and the discontinuation of activities. The shift in revenues accounted for 2.9 million euros (3 million dollars) or 4.4 percent of prior year revenues and was due to later delivery dates and growing consignment sales.

Ahlers also said that as in the previous fiscal year, the revenues in the first three months were also influenced by the discontinued Gin Tonic and private label activities representing total decline by 1.2 million euros (1.27 million dollars) or 1.8 percent of the prior year revenues. Because of these two factors and in spite of the positive fundamental trend, consolidated sales revenues declined by 3.1 million euros (3.2 million dollars) or 4.7 percent from 66.2 million euros (70 million dollars) to 63.1 million euros (66 million dollars).

The company said, due to the discontinuation of low-margin business, the gross profit margin improved by a moderate 0.4 percentage points from 51.7 percent to 52.1 percent, thus putting a damper on the revenue effect on gross profit. The reduced operating expenses were down by 0.3 million euros (0.31 million dollars) or 1 percent on the previous year to 28.6 million euros (30 million dollars), also had a positive effect on the earnings levels. These cost savings were primarily attributable to reduced personnel expenses.

The company added that this was insufficient to offset the revenue-related drop in gross profit by 1.3 million euros (1.37 million dollars) or 3.8 percent, EBIT before special effects declined by 1 million euros (1.06 million dollars) from 5.3 million euros (5.6 million dollars) to 4.3 million euros (4.5 million dollars) or down 18.9 percent.

Picture:Pierre Cardin website