Adler Modemärkte downgrades FY18 revenue forecast

In light of the extraordinarily hot and long summer as well as downbeat industry expectations for the holiday season, Adler Modemärkte AG had revised downward its forecast for 2018 overall as reported in the 2017 Annual Report. The management now expects revenue for the overall year to be down year on year at 525.8 million euros (601 million dollars); and the company now expects EBITDA to range between 20 million euros and 24 million euros (23 -27 million dollars), down from 26-29 million euros (30-33 million dollars).

The company said in a statement that due to extremely hot and long summer, sales at Adler were limited to a low single-digit percentage range in the third quarter of 2018. In the months of July to September, the Group revenue of 117.3 million euros (134 million dollars), decreased by 2.4 percent, while for the nine-month period Adler generated sales of 360.4 million euros (412 million dollars), a drop of 3.7 percent compared to the same period in the previous year. On a comparable basis, the decline was 1.2 percent in the third quarter and 3.1 percent during the nine months.

The gross profit margin, Adler said was stable during the quarter despite the lower sales at 50.3 percent, while in the nine-month period, the margin improved by 90 bps to 53 percent. The company recorded an after-tax loss of 14.7 million euros (16.8 million dollars), which resulted in EPS of negative 0.80 euros.

The company expects positive effects of Adler-2020 and from the previously announced conversion of the logistics provider to be visible in the fiscal year 2019. Therefore, the company continues to expect that it will be able to increase EBITDA by more than 50 percent by 2020, over the operational value in 2017 of 25.4 million euros (29 million dollars).

Picture:Adler Modemärkte website