IC Group reveals 2.2 percent decline in H1 revenue

Consolidated revenue for H1 2017/18 at IC Group amounted to 1,483 million Danish krone (246.7 million dollars) corresponding to a reduction of 2.2 percent or 1.5 percent in local currency). The company said, revenue decreased in the wholesale channel whereas the retail channel reported increased revenue. The gross margin increased by 1.3 percent to 57.9 percent compared to the same period last financial year. The consolidated operating profit amounted to 207 million Danish krone (34.4 million dollars) compared to 180 million Danish krone (29.9 million dollars) last year, resulting in an EBIT margin of 14 percent compared to 11.9 percent for H1 2016/17.

Review of IC Group’s H1 performance

In the second quarter, Peak Performance generated revenue of 313 million Danish krone (52 million dollars) corresponding to a growth of 17.2 percent or 18.5 percent in local currency). The company added that revenue development was driven by the wholesale channel as a consequence of higher in-season selling and timing of deliveries from Q1 2017/18. Furthermore, the retail channel also contributed to this growth, which was driven by the full-year effect of new stores as well as increased outlet activity. The operating profit amounted to 61 million Danish krone (10 million dollars) corresponding to an EBIT margin of 19.5 percent.

Revenue from Tiger of Sweden for the quarter declined by 14.1 percent or 13.1 percent in local currency to 189 million Danish krone (31.4 million dollars). Both the retail channel as well as the wholesale channel reported lower revenues during the period. The operating loss amounted to 3 million Danish krone (0.5 million dollars) against a profit of 6 million Danish krone (1 million dollars) resulting in a negative EBIT margin of 1.6 percent compared to positive EBIT margin of 2.7 percent last year.

By Malene Birger generated revenue of 78 million Danish krone (12.9 million dollars), a growth rate of 1.3 percent or 2.2 percent in local currency driven by the retail channel from both physical stores as well as e-commerce. The operating profit amounted to 5 million Danish krone (0.8 million dollars), and the EBIT margin improved to 6.4 percent.

Revenue from the group's other brands decreased by 8 percent or 7.6 percent in local currency to 92 million Danish krone (15.3 million dollars) for Q2 2017/18 driven by Saint Tropez. The operating loss amounted to 2 million Danish krone (0.3 million dollars) resulting in a negative EBIT margin of 2.2 percent against positive EBIT margin of 4 percent last year.

Consolidated revenue amounted to 673 million Danish krone (111.9 million dollars), rise of 1.1 percent or 2.1 percent measured in local currency driven by the wholesale channel of Peak Performance and the retail channel of By Malene Birger partly offset by the lower sales reported by the wholesale channel of Tiger of Sweden. During Q2 2017/18, the total number of stores was unchanged as Peak Performance opened one store and Saint Tropez closed one store. The gross profit amounted to 387 million Danish krone (64.3 million dollars) and the gross margin increased to 57.5 percent.

Segment highlights of H1 results

In the first half, Peak Performance generated revenue of 659 million Danish krone (109.7 million dollars), a growth of 7.2 percent or 8.1 percent in local currency driven by both the wholesale channel as well as the retail channel. The operating profit amounted to 133 million Danish krone (22 million dollars) corresponding to an EBIT margin of 20.2 percent.

Revenue from Tiger of Sweden declined by 10.6 percent or 9.9 percent in local currency to 455 million Danish krone (75.7 million dollars). Revenue from the wholesale channel declined due to lower order intake and in-season selling whereas revenue from the retail channel increased. The operating profit amounted to 44 million Danish krone (7.3 million dollars), and the EBIT margin thus declined to 9.7 percent against 12 percent.

By Malene Birger generated revenue for H1 of 174 million Danish krone (28.9 million dollars) declined 1.1 percent or 0.5 percent in local currency driven by the wholesale channel as a consequence of lower in-season selling whereas e-commerce and the physical stores contributed to growth in the retail channel. The operating profit amounted to 13 million Danish krone (2.1 million dollars), and the EBIT margin improved to 7.5 percent.

Revenue from the group's other brands decreased by 9.8 percent or 9.5 percent measured in local currency to 194 million Danish krone (32.2 million dollars) driven by the retail channel of Saint Tropez. The operating profit amounted to 1 million Danish krone (0.1 million dollars) resulting in an EBIT margin of 0.5 percent against 7.9 percent last year.

IC Group maintains full year outlook

Based on year-to-date performance as well as our current expectations for the rest of the year, the company has maintained the guidance for the financial year 2017/18 for the group. IC Group expects to realize a minor revenue reduction compared to the financial year 2016/17 and an EBIT margin of approximately 5percent.

For Peak Performance, the company still expects a moderate revenue growth but higher earnings compared to 2016/17. Expectations for Tiger of Sweden are unchanged and revenue is expected to decline while earnings are expected to be significantly reduce compared to last financial year. For By Malene Birger, IC Group expects a moderate revenue decline but significant earnings improvement. For other brands, the company expects that the performance in physical retail in Saint Tropez will lead to a significant revenue and earnings decline leading to an earnings deficit for 2017/18.

Picture:Peak Performance website