Fashion chain KappAhl Q3 FY'13 sales up 5.6%

Highlights:

- Net sales increased by 5.6 per cent for the quarter. Of this, the increase in comparable stores was 6.5 per cent.
- The gross margin improved by 2.1 percentage points.
- The equity/assets ratio increased to 47.6 per cent.
- Improved operating profit for the fourth quarter in a row.

KappAhl’s net sales for the quarter amounted to SEK 1,210 (1,146) million, an increase of 5.6 per cent. The development is explained by the change in comparable stores of 6.5 per cent, the effect of new and closed stores of 1.4 per cent, and translation differences in currencies totalling -2.3 per cent. Sales clearly improved in all business areas. These improvements are apparent through a positive sales trend in comparable stores in all countries.

Gross profit for the quarter was SEK 740 (677) million, which corresponds to a gross margin of 61.2 (59.1) per cent. A good balance in inventories combined with an improved range has resulted in a higher percentage of full price sales.

Selling and administrative expenses for the quarter were SEK 664 (648) million, excluding non-recurring items. The non-recurring item of SEK 12 million refers to the cost of staff cuts of about 40 positions in central functions. Including non-recurring items selling and administrative expenses were SEK 676 (648) million in the third quarter.

The operating profit was SEK 64 (29) million and excluding non-recurring items SEK 76 (46 million). This corresponds to an operating margin of 5.3 (2.5) per cent or 6.3 (4.0) per cent excluding non-recurring items. Depreciation according to plan was SEK 33 (37) million.

Net financial income was SEK -21 (-34) million for the quarter. The improvement in net financial income is due to the rights issue in the autumn and sale of real property, as well as a positive cash flow from operations. Since the company's debts were reduced during the quarter a surplus on interest swaps arose, which entailed an extra cost of SEK 6 million. In addition the improved earnings have meant lower interest expense on the Company's debt.

Profit/loss after financial items was SEK 43 (-5) million and the profit/loss after estimated tax was SEK 32 (-10) million. Earnings per share for the quarter were SEK 0.43 (-1.46).

"I am very pleased that KappAhl is reporting an improved result for the fourth quarter in a row. We continue to show growth with improved margins and reduced net debt…” Johan Åberg, President and CEO.

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KappAhl