IC Group reports 9.2 percent revenue decline in FY2017/18

IC Group has reported 9.2 percent revenue decline measured in local currency from the Group's continuing operations to 1,535 million Danish krone (240.4 million dollars) for the fiscal year 2017/18. The company said, gross margin was 1 percentage point higher than last financial year. The operating profit (EBIT) amounted to 57 million Danish krone (8.9 million dollars) compared to 24 million Danish krone (3.7 million dollars) corresponding to an EBIT margin of 3.7 percent compared to 1.4 percent last year.

For the Group as a whole, the company said, revenue declined by 3.9 percent measured in local currency to 2,602 million Danish krone (407.6 million dollars), and the operating profit amounted to 184 million Danish krone (28.8 million dollars) corresponding to an EBIT margin of 7.1 percent.

The company’s operating profit of continuing operations amounted to 36 million Danish krone (5.6 million dollars) against 16 million Danish krone (2.5 million dollars). The company added that accounting gain from the divestment of Peak Performance amounted to approximately 1.5 billion Danish krone.

Q4 performance of IC Group’s core brands

Revenue from Tiger of Sweden for Q4 2017/18 declined by 6 percent or 3 percent in local currency to 188 million Danish krone (29.4 million dollars). The company added that revenue from the wholesale channel increased, and the revenue decline was consequently driven by the retail channel and in particular physical stores. The same-store revenue declined by 12.9 percent. Tiger of Sweden generated an operating loss of 15 million Danish krone (2.3 million dollars) corresponding to a negative EBIT margin of 8 percent compared to negative EBIT margin of 13.5 percent.

Revenue from By Malene Birger, IC Group added, amounted to 75 million Danish krone (11.7 million dollars), a reduction of 8.5 percent or 7.3 percent in local currency, driven by both the wholesale channel as well as the retail channel, while the same-store revenue decreased by 11.4 percent. By Malene Birger realized an operating profit of 1 million Danish krone against an operating loss of 7 million Danish krone corresponding to an EBIT margin of 1.3 percent compared to negative EBIT margin of 8.5 percent.

Revenue from Saint Tropez for Q4 2017/18 declined by 27.3 percent or 26.6 percent in local currency to 56 million Danish krone(8.7 million dollars), while the same-store revenue was reduced by 19.2 percent. The revenue decline was driven by the Nordic region while markets outside the Nordic region reported growth. Saint Tropez realized an operating loss of 4 million Danish krone and a negative EBIT margin of 7.1 percent for Q4 2017/18.

Revenue from Designers Remix also declined by 37.5 percent to 10 million Danish krone (1.5 million dollars) and same-store revenue from the retail channel decreased by 20.3 percent. The brand realized an operating loss of 3 million Danish krone corresponding to a negative EBIT margin of 30 percent.

Total revenue from the Group's continuing operations for Q4 2017/18 amounted to 332 million Danish krone (52 million dollars) corresponding to a reduction of 10.8 percent or 9.5 percent in local currency. The same-store revenue declined by 14.3 percent. The gross profit of the Group's continuing operations declined by 16 million Danish krone to 179 million Danish krone (28 million dollars), while the gross margin increased by 1.6 percentage point to 53.9 percent.

Peak Performance generated a revenue of 100 million Danish krone (15.6 million dollars) corresponding to a decline of 17.4 percent or 15.2 percent in local currency), while the same-store revenue was reduced by 16.9 percent. The company said, revenue from the Nordic region and Rest of Europe decreased while revenue from outside Europe increased. Peak Performance generated an operating loss of 36 million Danish krone (5.6 million dollars) corresponding to a negative EBIT margin of 36 percent, at the same level as last financial year.

IC Group reveals outlook for FY2018/19

For the financial year 2018/19, IC Group said, a flat revenue development for the remaining brands in total, measured in local currency, is expected. The EBIT margin is expected to be realized at a level of 0-1 percent prior to the non-recurring costs. At Tiger of Sweden, revenue is expected to increase while the nominal earnings are expected at the same level as last financial year. Growth, the company added, will primarily be driven by international wholesale revenue and e-commerce, while higher costs for staff and marketing will have a negative impact on earnings.

At By Malene Birger, revenue is also expected to increase while the nominal earnings are expected at the same level as last financial year. At Saint Tropez, revenue is expected to continue to decline while the nominal earnings are expected to improve compared to last financial year and at Designers Remix, both revenue and nominal earnings are expected to be reduced driven by a lower wholesale revenue.

The company’s board of directors has decided to propose a total ordinary dividend of 83 million Danish krone (13 million dollars) in respect of the financial year 2017/18. The company added that as no dividend is paid on the company's treasury shares, the dividend corresponds to at least 5 Danish krone per eligible share depending on the result of the announced share buy-back programme.

Picture:Tiger of Sweden website