Tom Tailor posts 0.8 percent increase in nine months sales

Tom Tailor Group sales in the first nine months increased by 0.8 percent to 695.1 million euros (758 million dollars) benefited from a strong performance by Tom Tailor. Gross profit increased slightly by 0.6 percent to 388.4 million euros (423 million dollars). Adjusted EBITDA reached 31.7 million euros (34 million dollars), 13.1 percent lower than in the prior-year period.

"Tom Tailor Group has continued to perform well in a challenging market environment," said Heiko Schäfer, COO and interim CEO of the company, adding, "Our Tom Tailor brand in particular recorded a strong growth in sales both in the wholesale and retail business. We are convinced that we took the right steps for a long-term improvement in the profitability of the Group. We are expecting the first visible successes already in the current quarter."

Tom Tailor sales grow 8.4 percent

Tom Tailor retail achieved an 8.4 percent increase in sales in the first nine months to 211.3 million euros (230 million dollars). The company said, growth was driven by the expansion of sales space in 2015. Since the end of 2015, the number of stores declined by two to 458. In the third quarter, the segment posted a sales increase of 6.7 percent but on a like-for-like basis, sales were slightly down by 1.7 percent.

Wholesale division increased sales by 4.5 percent to 262.9 million euros (286 million dollars). The segment benefited from a strong surge in the third quarter, with a sales increase of 8 percent. Since December 31, 2015, the number of shop-in-shop spaces increased by 135 to 3,091, while the number of franchise stores rose by four to 207.

In the first nine months, the Bonita brand generated sales of 220.8 million euros (240 million dollars). The company said, after a modest first half-year, the market remained challenging in the third quarter due to the lack of momentum in September. As a result, Bonita's sales were down 19.7 percent in that period. The company has reduced its store network by 41 to 982 locations since the end of 2015.

Expects positive impact of cost optimization by Q4

In October, the company announced a comprehensive cost and process optimization program. The company said, first positive effects from the program are expected to be evident in the fourth quarter.

Against the background of the cost and process optimization program and the related 75 million euros (81 million dollars) one-off expenses in the third quarter of 2016, the Executive Board has adjusted the full-year forecast for 2016 and now expects a moderate year-on-year sales increase in the low single digit range. The reported EBITDA for 2016 is expected in the range between 10-20 million euros (10.9-21.8 million dollars).

Picture:Tom Tailor