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Geox Q1 apparel sales rose 4.5 percent

By Prachi Singh

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Geox consolidated revenues for the first quarter of 2017 increased by 1.2 percent or 0.1 percent at constant exchange to 297.9 million euros (324 million dollars). Footwear sales amounting to 267.4 million euros (291 million dollars), increased 0.8 percent or declined 0.2 percent at constant forex. Apparel sales of 30.5 million euros (33 million dollars) rose 4.5 percent or 2.8 percent at constant forex.

“I am satisfied with the results achieved by Geox Group in the first quarter. This is thanks to overall good performance across all geographical areas, with the expected increase in margins also being confirmed. I am therefore confident that the Group will achieve positive results this year, with profitability in line with our expectations,” said Mario Moretti Polegato, Chairman and Founder of Geox in a press release.

Revenues in Italy remained flat in Q1

Revenues generated in Italy, the domestic market were the company said, in line with the first quarter of 2016 since the planned optimization of mono-brand distribution was offset by the growth recorded by the wholesale channel.

Revenues generated in Europe, representing amounted to 126.1 million euros (137 million dollars), a decline of 1.9 percent or 2 percent at constant forex due to planned rationalization of mono-brand stores, partially offset by the positive performance of the wholesale channel and growth in LFL sales recorded by both directly operated and franchised mono-brand stores.

North America recorded a turnover of 14.5 million euros (15 million dollars), down 7.8 percent at current and 13 percent at constant forex, mainly as a result of the Canadian market. A 14.2 percent or 9.6 percent at constant forex growth in turnover was recorded in the Rest of the World compared with the first quarter of 2016 driven by the positive performance in Russia, Eastern Europe and China.

DOS channel revenues declined 2.1 percent

Revenues generated by directly-operated stores, DOS of 85.9 million euros (93 million dollars), declined 2.1 percent or 3.2 percent at constant forex. Comparable store sales, however reported a growth of 1.6 percent with positive performance in all of the group’s main markets. Comparable sales generated by directly operated stores to date grew 1.2 percent. Like-for-like sales in March and April have recorded an overall increase of 3 percent.

Sales of the franchising channel of 53.6 million euros (58 million dollars), declined 6.9 percent or 7.7 percent at constant forex. Comparable sales recorded a slight decline, which is the result of performance during the January sales due to a difficult comparison base. Wholesale store sales amounted to 158.4 million euros (172 million dollars), an increase of 6.3 percent or 5.1 percent at constant forex.

As of March 31, 2017, the overall number of Geox Shops was 1,134 of which 451 DOS. During the first quarter of 2017, 17 new Geox Shops were opened and 44 have been closed, in line with the rationalization plan of the DOS network.

Expects to achieve profitability in FY17

The management expects that the positive performance of the wholesale channel combined with a slight increase in like-for-like sales will more than compensate for the effects of the planned network optimization involving both directly operated and franchised stores.

The management also assumes that the aforementioned low single digit increase in turnover and the expected improvement in gross margin, combined with the measures taken to boost efficiency and control costs, will allow the group to achieve levels of profitability that are in line with market expectations.

Geox