- Prachi Singh |
Kappahl's net sales for the third quarter were 1,200 million Swedish krona (129 million dollars), a decrease of 3.3 percent compared to the previous year. The company said, the drop in net sales was driven by 5.6 percent decline in comparable stores, 1.5 percent in new and closed stores, and currency translation differences totalling 0.8 percent.
Commenting on the company’s third quarter, Elisabeth Peregi, President and CEO of Kappahl, who took up the position in April 2019, said in a statement: The third quarter was challenging for Kappahl with a very weak close in the Nordic markets. Turnover in women’s wear decreased, while children’s wear increased and continued to report strong business. In terms of sales, the third quarter was a disappointment, apart from Poland that continued their positive sales development. Kappahl’s offer in the Nordic markets was too weak, as our women’s wear hasn’t been attractive enough.”
Highlights of Kappahl’s Q3 trading
The company added that gross profit for the quarter was 730 million Swedish krona (78.5 million dollars), corresponding to a gross margin of 60.8 percent compared to 64.5 percent in the previous year. The operating profit was 6 million Swedish krona compared to 121 million Swedish krona in the same quarter last year, equivalent to an operating margin of 0.5 percent compared to 9.7 percent.
The operating profit adjusted for one-off costs was 49 million Swedish krona (5.2 million dollars) compared to 121 million Swedish krona, while profit before tax was 2 million Swedish krona (0.2 million dollars) compared to 121 million Swedish krona and profit after tax was 6 million Swedish krona (0.6 million dollars) compared to 94 million Swedish krona. Earnings per share for the quarter were 0.08 Swedish krona compared to 1.22 Swedish krona in the prior year.
At the close of the quarter, Kappahl had 383 stores of which 26 were Newbie stores. Of the total number of stores, there were 183 in Sweden, 101 in Norway, 62 in Finland, 32 in Poland and five in the United Kingdom. Five stores were opened during the quarter and two were closed.