World Footwear

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Geox with lower sales

Jun 10, 2019 Italy
Geox with lower sales
The Italy-based footwear brand reported first quarter results, marked by a 1.3% decline in sales at current exchange rates (-1.6% at constant rates)
Matteo Mascazzini, Chief Executive Officer, commented: “In the first three months of 2019, Geox has recorded a slight decreae in sales compared with last year. Performance during the quarter has shown an increase in like-for-like sales generated by directly-operated stores, especially in the e-commerce channel, offsetting the decrease of the wholesale and franchising channels, which were affected by the ongoing rationalisation process, aimed at strengthening the company's solidity and supporting the brand’s image, and by the optimisation of our network presence.

First quarter sales

Consolidated sales in the first quarter of 2019 amounted to 260.9 million euros (264.5 million euros in the first quarter of 2018), down by 1.3% (-1.6% at constant forex).

Sales generated by wholesale stores, representing 54% of group revenue, amounted to 140.3 million euros, down by 1.9% (-2.0% at constant forex). Performance was mainly affected by the rationalisation over the last quarters, aimed at supporting the group's margin performance and image, in line with the Strategic Business Plan. Sales generated by the franchising channel, which account for 14% of group revenue, amounted to 36.8 million euros, down by 12.9% (-12.6% at constant forex). Performance in the franchising channel particularly reflects the planned rationalization of the store network in the last quarters, with a net reduction of approximately 10% of the network compared with 2018, due to closures and conversions into DOS. Revenues generated by directly-operated stores, DOS, representing 32% of the group's revenue, amounted to 83.8 million euro and were up by +5.8% (+4.9% at constant forex). This is mainly due to the good performance of like-for-like sales (+3.4%) and a slightly positive space effect compared with the first quarter of 2018. Particularly strong growth continued in the e-commerce channel (+25%).

Sales by Geography

Sales generated in Italy, the domestic market which represents 31% of the group's revenue, were down by 4.0%. Revenue generated in Europe, representing 43% of Geox's revenue, amounted to 112.7 million euros, compared to 113.9 million euros in the first quarter of 2018, down by 1.0% (-1.1% at constant forex). North America recorded a turnover of 10.7 million euros, down by 1.1 million euros (-9.8% at current forex and -13.1% at constant forex), mainly due to the negative performance of the wholesale channel, which has been subject of a careful review and selection process for partners, with a focus on players more in line with the group's planned strategy to improve brand perception. A 3.8% increase in sales was recorded in the Rest of the World compared with the first quarter of 2018 (+3.4% at constant forex), with double-digit growth in like-for-like sales for directly-operated stores and in the wholesale channel in Eastern Europe. The Asia Pacific area reported substantially stable sales in the wholesale channel, with slightly negative sales being recorded by directly-operated stores.

Sales by Segment

Footwear sales represented 91% of consolidated sales, amounting to 236.5 million euros, down by 1.4% (-1.8% at constant forex) compared with the first quarter of 2018. Apparel sales represented 9% of consolidated sales, amounting to 24.4 million euros, compared with 24.6 million euros in the first quarter of 2018 (-0.6% at current forex, +0.1% at constant forex).

Geox Shops

As of the 31st of March 2019, there was a total of 991 Geox shops, of which 444 were DOS. During the first quarter of 2019, 16 new Geox shops were opened and 40 were closed.

Photo by Headway on Unsplash

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