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Gerry Weber Q1 sales down but EBITDA improves 7.7 percent

In the first quarter of 2016/17, Gerry Weber International generated consolidated sales revenues of 209.2 million euros (224 million dollars). The company said, although sales revenues declined by 2.1 percent, consolidated EBITDA increased by 7.7 percent to 15.6 million euros (16.7 million dollars).

Commenting on the company’s first quarter trading, Ralf Weber, CEO of Gerry Weber International said in a media release, “The first three months of 2016/17 show that the FIT4GROWTH realignment programme is effective and is beginning to bear fruit. The measures already implemented have not only had a positive effect on the cost structure of the core segment but have also helped to accelerate the modernisation of our brands.”

Core retail sales down but wholesale revenues up 11.1 percent

The Gerry Weber core segment contributed 159.2 million euros (170 million dollars) compared to 163.2 million euros (175 million dollars) in Q1 previous year to the group’s total revenues of 209.2 million euros. Revenues generated by the core brands – Gerry Weber, Taifun and Samoon were down by 2.4 percent on the prior year quarter due to the decline in revenues of the Gerry Weber core retail segment. The company said, latter is attributable to the fact that no more revenues were generated by the stores closed in the previous year as well as to a 3.4 percent drop in like-for-like revenues compared to 7.5 percent last year.

The Gerry Weber core wholesale segment recorded an 11.1percent increase in sales in Q1 to 59.5 million euros (63.8 million dollars). This increase, Gerry Weber said, is attributable to a partial shift in delivery dates since while part of the merchandise for the company’s wholesale partners had been delivered in February in the past financial year, it was invoiced in January in the current financial year, i.e. in the first quarter instead of the second quarter.

Although Hallhuber’s sales revenues remained more or less unchanged at 50 million euros (53 million dollars), Gerry Weber’s subsidiary was able to improve its gross margin significantly from 58.9 percent to 64.5 percent due to a better price structure of the merchandise compared to the prior year period. The gross margin of the Gerry Weber core segment declined from 63.1 percent in the prior year period to 61.8 percent.

The company said, after deduction of slightly higher depreciation/amortisation of 11.5 million euros (12 million dollars) plus 0.9 million euros (0.96 million dollars), consolidated EBIT improved by 5.1 percent to 4.1 million euros (4.4 million dollars). The group’s EBIT margin increased to 2 percent.

Board confirms FY17 forecast

The company said, in view of the prevailing market environment, the continuation of the Fit4Growth programme and the business performance in the first three months of the current financial year, the Managing Board confirms its forecast for the financial year 2016/17.

The Managing Board expects sales revenues for the current financial year to be 2 percent to 4 percent below the prior year level and consolidated EBITDA reported of between 60 and 70 million euros (64 to 75 million dollars) against 77.3 million euros (82 million dollars) last year. Consolidated EBIT reported is expected to amount to between 10 and 20 million euros (10.7 to 21 million dollars).

Picture:Hallhuber website