Tom Tailor Group reports flat sales rise in Q1

The Tom Tailor Group said that the company's consolidated sales of 218.9 million euros (238 million dollars), similar to prior year's quarter level. Consolidated gross profit amounted to 116.2 million euros (126 million dollars) against 118.9 million euros reported same quarter, last year. The gross margin reached 53.1 percent compared to 54.3 percent. Reported EBITDA increased to 8.7 million euros (9.4 million dollars), while EBIT amounted to 1.6 million euros (1.7 million dollars) against 5.9 million euros (6.4 million dollars).

"After a solid start to the year, we are on target both in terms of business performance and our realignment," said Heiko Schäfer, the company’s CEO in a statement, adding, "At the same time, we are working at high pressure on strengthening our brands and preparing ourselves for the time after the RESET program's conclusion. The first quarter's results clearly mirror the RESET's impact. However, we still have a lot of work to do."

Sales performance across segments

The company said, sales for the Tom Tailor umbrella brand increased slightly to 152.3 million euros (166 million dollars) and gross profits reached 74.1 million euros (80 million dollars), similar to the previous year's level. The gross margin amounted to 48.7 percent compared to 49 percent. The performance of the Tom Tailor wholesale segment was stable. Sales amounted to 87.5 million euros (95.5 million dollars) compared to 87.3 million euros (95.2 million dollars), gross profit to 40.2 million euros (43.8 million dollars). Tom tailor wholesale generated 40 percent of consolidated sales.

Sales for the Tom Tailor umbrella brand's retail segment rose by 1.4 percent in the reporting period to 64.8 million euros (70 million dollars) driven by a positive trend in some foreign markets, while activities in Germany were impacted by the ongoing restructuring. Gross profits, at 33.9 million euros (37 million dollars), were nearly unchanged, while the gross margin decreased slightly from 52.9 percent to 52.3 percent. The Tom Tailor retail segment accounted for 30 percent of consolidated sales.

Due to store closures, sales at Bonita decreased from 67.8 million euros (74 million dollars) to 66.6 million euros (72 million dollars). Gross profits, at 42.1 million euros (45 million dollars), were also below the previous year level. The gross margin in the segment decreased from 66.2 to 63.1 percent. Bonita contributed around 30 percent of consolidated sales.

In April 2017, the company signed a licensing agreement with the Kids Fashion Group on the production and distribution of its Tom Tailor Kids line. The company said, future license revenues from this partnership will be offset by the loss of sales from the previous own distribution of the kids line. As a result the company now expects that group sales in 2017 will be slightly below the previous year's level. However, the management board continues to expect a sharp increase in the reported EBITDA for the full year.

Picture:Facebook/Tom Tailor