Wolford reports widening losses, but on track to deliver 'sustained profitability'

Austrian clothing manufacturer Wolford has reported widening losses for the period January to December, 2022, as it continues to tackle its operational efficiency.

The group said its sales came in at 125.5 million euros for the year which, while beating the previous year by 15 percent, did not align with its EBIT, which took a 28.6 million euro hit, as it had anticipated in its H1 results.

It noted in a regulatory filing that positive sales growth came as a result of increased investments in marketing activities and designer collaborations, as well as the impact of its new elevated product proposition.

Revenue growth was evident across all of its DTC channels, with retail and online rising 28 percent and 7 percent, respectively, however its wholesale saw a decline of 1 percent.

The company experienced strong growth in the US, where its sales rose 44 percent. Despite this, in EMEA sales only grew 9 percent and in the APAC region the company said it only slightly exceeded the level of the previous year.

Regardless of the efforts of Wolford’s new management board, which took over in August 2022, the group’s negative EBIT for H1 carried into the second half of the year, resulting in an annual EBIT loss of 28.6 million euros. Ultimately, its earnings after tax came in at minus 34.9 million euros.

The company said that further measurements have been taken to increase its operational efficiency by accelerating and broadening its restructuring efforts, with a particular focus on cost control. Additionally, in February, the firm secured a capital increase of 17.6 million euros to secure liquidity.

Wolford noted that any measures initiated by the team in August 2022 will show their impact in 2023, adding that this has already rang true for Q1, with sales coming in above budget and earnings “on track to finally deliver the sustained profitability” promised.