Piquadro reports revenue growth of 2.6 percent in H1

For the half-year at September 30, 2015, the Piquadro Group reported consolidated revenue of 33.18 million euros (35.22 million dollars), up 2.6 percent compared to 32.34 million euros (34.33 million dollars) for the same period of the previous year. The company has attributed the increase in sales to the good performance of its wholesale channel while sales on the DOS channel were in line with those of the previous year.

“The first half of the year ended with moderate growth but the acceleration in the second quarter compared to the first makes us confident for the coming months,” said Marco Palmieri, President and CEO of Piquadro, adding, “The like for like of the directly operated stores shows a marked positive sign, the pre-tax profit, which takes account of foreign exchange hedging, reported significant growth and the NFP showed an improvement of about two million euros.”

First half growth driven by wholesale channel

The revenues of the wholesale channel, which represent 67.2 percent of the Group’s total turnover, showed a 3.9 percent increase, driven by the rise of 6.6 percent in the domestic market and of 76.6 percent in the extra-European markets. Sales in Europe decreased by 16.5 percent, mainly due to the orders reduction in Russia. With the exclusion of Russia, wholesale channel sales in Europe fell by 2.7 percent due to temporary slowdowns in some peripheral countries.

The revenues reported by the DOS channel were flat as a result of marginal quantities sold in existing stores which was offset by the closing of nine stores located primarily in the Far East (seven more stores were closed in the first half of 2014/2015). In the first half 2015/2016 6 new stores were opened with a contribution of 6 percent on DOS channel sales. The DOS channel also includes ecommerce revenues, which increased by 27.3 percent.

The same store sales growth data (SSSG), calculated as average global growth rates of profits registered in the existing directly operated stores on April 1, 2015, was positive and equal to the 7.5 percent in the period at current exchange rates.

Growth witnessed in domestic and Asian markets

From a geographic point of view, the Group’s revenues as of 30 September 2015 show a 6.6 percent increase in the domestic market which still represents an important share of 78.2 percent of the Group’s revenues. In the extra-European market the Group recorded a 5.8 percent increase owing to the growth in countries such as Mexico, China and Malaysia and despite the closure of five directly operated stores in China, Hong Kong, Macao and Taiwan.

In Europe, the Group recorded a total decrease of 14.6 percent mainly due to continuing decline in orders from Russia, which witnessed a 5 percent. EBITDA was 4.6 million euros (4.8 million dollars) and 13.9 percent of the revenues compared to 4.9 million euros (5.2 million dollars) in the same period of the previous year. Group EBIT was about 10.1 percent of revenues against 11.2 percent on September 30, 2014. The company said that decrease in profitability ratios compared to the first half of the previous year was due to several factors like the different mix of wholesale/DOS sales; the higher production costs due to the appreciation of the US dollar; increased investment in marketing; the lower margins of newly opened stores located in prestigious areas; store closing due to the fire at Fiumicino T3. The consolidated net profit was stable with a very slight increase of 0.1 percent compared to the first half of the previous year.

Predicts positive outlook for 2015/2016

While the company says that the development of the Piquadro Group in the 2015/2016 financial year will be determined by the growth on international markets, the management foresees a positive trend for the rest of financial year 2015/16 and growing rates, similar to those experienced in the first semester. In terms of profitability the company expects operating margins to grow on the back of the reorganization of less profitable business areas.