- Prachi Singh |
Consolidated sales revenues at Ahlers Ag dropped by 6.5 million euros (7.6 million dollars) or 5.5 percent to 110.8 million euros (130 million dollars) in the first six months of 2017/18. However, jeans revenues generated by Pierre Cardin and Pioneer Authentic Jeans, Ahlers said, increased by 2.8 and 2.2 percent, respectively. The company added that both brands were particularly successful in Germany and Switzerland but this positive performance was offset by declining stock sales of suits and outdoor jackets, which were responsible for three fourth of the total drop in revenues.
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Sales to the remaining customers in Russia and Ukraine picked up moderately by 0.2 million euros (0.23 million dollars), but this growth was more than offset by the revenues lost as a result of the orders cancelled by the two major customers. Consequently, the company’s total sales revenues were down by 1.6 million euros (1.8 million dollars) on the previous year.
Revenue decline affects Ahlers’ H1 earnings
Due to reduced procurement costs, the gross profit margin increased by a moderate 0.9 percentage points to 50.4 percent in the first half of 2017/18. This dampened the revenue effect on gross profits, which fell by 2.2 million euros (2.5 million dollars) to 55.8 million euros (65.5 million dollars). Due to the revenue effect consolidated net income dropped by 1.3 million euros (1.5 million dollars) to 0.4 million euros (0.47 million dollars).
The company added that its joint venture in Russia took up operations with effect from March 1, 2018. After obtaining the approval for the acquisition of the shares from the competent authorities, Ahlers now holds the 60 percent stake in the JV. The joint venture is responsible for the wholesale business of Pierre Cardin and Pioneer and operates eleven Pierre Cardin stores in Russia. The remaining 40 percent of the shares are held by a long-standing business partner of Ahlers AG.
Commenting on the full year forecast, Ahlers said, given that some Eastern European customers did not accept the deliveries of summer merchandise, orders placed by these customers were cancelled also for the coming autumn/winter season, and the management board expects suit sales to continue to decline, so sales revenues are expected to show a downward trend in the second half of 2018, which should be slightly better than the trend of the first six months. The company added that mainly because of the development of the first half of the year consolidated net income, for 2017/18 should be close to break-even point, which would be clearly below the previous year’s 1.9 million euros (2.2 million dollars).
Picture:Pierre Cardin website