Wolford H1 revenues dip 14.7 percent

Wolford generated revenues of 67.62 million euros (70.60 million dollars) in the first half of the current financial year, a year-on-year decline of 14.7 percent. The company said, drop in revenue equalled 13.1 percent when adjusted for currency effects, in particular the decrease in value of the British pound. As a consequence of weaker customer frequency and a delivery date shifted to the next quarterly period, Wolford said, second-quarter revenues were down 11.9 percent to 39.88 million euros (41.64 million dollars).

Operating results (EBIT) in the second quarter only turned slightly positive to 0.03 million euros (0.03 million dollars). Against the backdrop of the substantial loss generated in the first quarter, EBIT in the first six months of the current financial year amounted to 8.24 million euros (8.60 million dollars) against 0.28 million euros (0.29 million dollars).

Wolford attributes revenue decline to weak consumer sentiment

A substantial portion of the revenue decline of 11.62 million euros (12.13 million dollars) in the first six months of the 2016/17, the company said, can be attributed to the development of the wholesale business. As a consequence of the delay in a delivery date for the fall/winter collection, first quarter figures did not include revenues from pre-season orders to the amount of 3.19 million euros (3.33 million dollars).

In addition, Wolford said, it delayed another delivery date for this collection to be closer to the Christmas season and thus to the third quarter, so that second-quarter revenues were also down by about 3 million euros (3.1 million dollars) from the prior-year level. On balance, revenues of the wholesale segment fell by 20 percent in the first half-year. Wolford-owned retail stores also reported a 12 percent drop in revenues, due to the lack of customer frequency in the boutiques.

Wolford posts negative EBIT and earnings before tax

As a result of the weak revenue development, operating earnings (EBIT) in the first six months of the current financial year amounted to -8.24 million euros, compared to -0.28 million euros in the previous year. EBIT in the prior-year period benefited from the sale of non-core rental apartments (other operating income to the amount of 1.09 million euros (1.13 million dollars). Adjusted for this special effect, EBIT in the first six months was 6.87 million euros (7.17 million dollars) below the comparable figure in 2015/16.

Wolford succeeded in breaking the downward revenue trend in November 2016, and achieved slight growth once again in its own retail stores on a like-for-like basis.

Wolford predicts drop in revenue for the full year

Recently Wolford predicted a slight drop in revenues and negative operating earnings in the low single-digit range for the current financial year. The ongoing program of measures designed to sustainably increase revenues and profitability, the company said, should show initial positive cost effects in the second half of the financial year, whereas a large part of the restructuring expenses was reported in the first six-month period.

The company added that it will be a challenge to attain the communicated business targets in the light of the company’s revenue development in the first half of 2016/17 and the third-quarter revenue development will be the decisive factor in this regard.

Picture:Wolford