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Gerry Weber Q1 net income declines to 14.5 million euros

By Prachi Singh

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Report |REPORT

The Gerry Weber Group generated sales revenues of 213.7 million euros (236.8 million dollars) in the first quarter of 2015/16. The 11.1 percent increase on the previous year is attributable to the consolidation of the Hallhuber subsidiary, which contributed 50.5 million euros (55.9 million dollars) to the Group’s revenues. Consolidated EBITDA of the Group declined from 24.2 million euros (26.8 million dollars) to 14.5 million euros (16 million dollars), which the company said was primarily due to the decline in the high-margin revenues of the wholesale segment and the core retail segment’s like-for-like revenues.

Commenting on the performance, Ralf Weber, CEO of Gerry Weber International said, “The first quarter of 2015/16 has highlighted the great importance of the “Fit4Growth” programme we introduced in February. We have initiated the individual measures with great determination and are now focusing on the complex tasks. We aim to present the first tangible results to our shareholders, to the public, our employees and business partners on a regularly basis at the upcoming quarterly reporting.”

First quarter like-for-like sales decline

The Gerry Weber Core Retail segment reported an expansion-related 3.4 percent increase in first-quarter sales revenues, however like-for-like revenues of the segment declined by 7.5 percent. Sales revenues of the Core Wholesale segment were down on the prior year quarter to 53.6 million euros (59.4 million dollars) against 86.4 million euros, same quarter last year.

Hallhuber revenues in the first quarter increased 26 percent owing to the opening of new points of sale and to above average like-for-like growth of 6.9 percent. Hallhuber contributed 5.1 million euros (5.6 million dollars) to the Group’s EBITDA in the first three months of 2015/16.

Announces outlook for 2015/16

The company said that continued difficult market environment and internal shortcomings of the past are weighing heavily on sales revenues and the profitability of the Gerry Weber core segments. On February 26, 2016, the Managing Board therefore announced a realignment programme for the Group in order to counter-act the current downward trend and secure profitability and growth in the long term.

In this context, the Managing Board confirms the guidance issued on the same day. The Managing Board projects Group sales revenues of between 890 euros (986 dollars) and 920 million euros (1,019.3 million dollars) for the financial year 2015/16, to which Hallhuber will contribute between 180 euros (199.4 million dollars) and 190 million euros (210.5 million dollars).

The implementation of the realignment programme is expected to lead to extraordinary expenses and write-downs totalling about 36 million euros (39.8 million dollars), which will weigh on the Group’s bottom line in the next 18 to 24 months. The Managing Board therefore expects Group EBIT to amount to between 10 and 20 million euros (11 and 22.1 million dollars) in the financial year 2015/15, the biggest part of which will be contributed by Hallhuber.

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