Companies

Ecco's 2022 earnings remained below pre-pandemic levels

Jul 4, 2023 Denmark

The Danish-based footwear group reported a 30% rise in sales in 2022 over the previous year, but with earnings “considerably below pre-pandemic levels”, it added that results were not satisfactory

As of the 31^stof December 2022, Ecco's net revenue totalled 1.59 billion euros, reflecting an increase of 30% across channels and markets, on a comparable basis to the prior year.

In these twelve months, therefore, the wholesale channel's net revenue reached grew by 4.5% year-over-year to 601.5 million euros, and the retail's net revenue (including e-commerce) rose sharply by 63.5% year-over-year to 880.4 million euros.

By region, instead, the footwear group recorded a 2022 net revenue of 694.3 million euros in Europe, the Middle East and Africa, which indicates an increase of 64.4% over the prior year, and in North America, its net revenue grew by 18.0% year-over-year to 248.6 million euros. Ecco also reported a 392.7 million euros net revenue in Greater China, up by 9.0%, and a 141.0 million euros net revenue in the Asia Pacific region, up by 30.7%, on a comparable basis to 2021.

The footwear segment, which accounts for the majority of the company's sales, posted a 2022 net revenue of 1.42 billion euros, up by 32.7%, and the accessories segment recorded a net revenue growth of 80.1% to 57.5 million euros, as compared to 2021. The leather business, analysed separately, saw its net revenue fall slightly by 0.6% to 103.8 million euros.

However, the company said that as earnings were “considerably below pre-COVID results in 2017-2019, the result for 2022 is not considered to be satisfactory”. Last year, Ecco's profit totalled 48.6 million euros, up considerably from the 13.5 million euros in profit recorded in the prior year, but far from the 147.6 million euros and 148.9 million euros registered in 2019 and 2018, respectively.

According to the Danish group, in addition to the negative impact of freight rates and the COVID-19 pandemic, which impacted business mainly in Asia, “further continuous disruptions in the global supply chain during 2022 affected our production, resulting in lack of stability in timely deliveries to our customers”. So, “to secure timely deliveries in 2023, it was decided to increase stock build and advance the production”, negatively affecting “the net working capital and the operational cashflow”, it added.

Image Credits: eccoglobalcdn.azureedge.net

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