IC Group Q1 same-store sales decline 6.6 percent

Consolidated revenue at IC Group for the first quarter amounted to 851 million Danish krona (123 million dollars) corresponding to a growth rate of 0.9 percent or 1.8 percent measured in local currency. The company said that during the quarter, it experienced low traffic in its physical stores across all brands, so the same-store revenue declined by 6.6 percent.

For the full year, the company, however, still expects to post a revenue growth rate measured in local currency of at least 6 percent but the EBIT margin is now expected to reach a level of 8-9 percent against previous estimate of around 9 percent due to the risk of a challenging retail climate for the remainder of the financial year.

Detailed review of the Q1 results

Peak Performance generated revenue of 348 million Danish krona (50 million dollars) corresponding to a growth rate of 1.5 percent or 2.2 percent in local currency. This increase, the company said, was driven by continued e-commerce growth as well as the impact from new stores opened during the financial year 2015/16, while timing effects had a negative impact on revenue by around 15 million Danish krona (2.1 million dollars). The operating profit amounted to 62 million Danish krona (9 million dollars) corresponding to an EBIT margin of 17.8 percent. The company attributed the reduced profit to higher sales-related costs, including costs for new stores.

Tiger of Sweden revenues of 289 million Danish krona (41million dollars) increased 4.3 percent or 5.5 percent in local currency. Growth in the wholesale channel was driven by a positive effect of 18 million Danish krona due to a shift in deliveries of goods from Q4 2015/16 to Q1 2016/17 and growth in the retail channel was driven by both new stores as well as continued e-commerce growth. The operating profit amounted to 55 million Danish krona (7.9 million dollars) corresponding to an EBIT margin of 19 percent.

Revenues for By Malene Birger declined by 4.8 percent or 3.4 percent in local currency to 99 million Danish krona (14 million dollars) due to low traffic in company-owned stores throughout the quarter under review. The operating profit amounted to 4 million Danish krona (0.5 million dollars) corresponding to an EBIT margin of 4 percent against 12.5 percent. Revenue from the Group's Other brands rose by 1.8 percent or 2 percent in local currency.

The Group’s gross profit amounted to 477 million Danish krona (69 million dollars), and the gross margin was 56.1 percent, at the same level as last financial year. The consolidated operating profit amounted to 135 million Danish krona (19 million dollars), and the EBIT margin thus amounted to 15.9 percent compared to 19.3 percent for Q1 2015/16.

IC Group updates outlook for FY2016/17

The company continues expect revenue growth rate measured in local currency of at least 6 percent. Based on the current exchange rates of the Group's primary sales currencies, this corresponds to a reported revenue growth rate of at least 5 percent driven by sales in both the wholesale channel as well as the retail channel.

The company plans to open 15-20 new stores as opposed to 10-15 stores as announced at the beginning of the financial year. For the remainder of the financial year, a flat same-store revenue is expected. However, the company says a risk of a tough and challenging retail climate for the remainder of the financial year may result in a potential negative impact on high-margin revenue from the physical stores as well as the supplementary sales to wholesale customers during the season.

Picture:Facebook/Tiger of Sweden