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MQ Holding Q3’FY14 operating profit doubles

June 18, 2014 (Sweden)

MQ experienced a strong third quarter, during which the company doubled its operating profit. Sales were impacted by the fact that the summer sale period in the preceding year began in May, which caused like-for-like sales, adjusted for discount effects, to increase 5.6 percent. The gross margin improved and significant cost savings were achieved. The company reported a strong cash flow and record-low level of net debt.
 
Third quarter (March 2014-May 2014)
Net sales amounted to SEK 350 million (354), down 1.1 percent. Sales in comparable stores declined 0.7 percent. Adjusted for discount effects in the preceding year, like-for-like sales rose 5.6 percent (according to the Swedish Retail Institute Index, the market increased 0.6 percent).
 
The gross margin was 61.3 percent (60.2). Operating profit totaled SEK 42 million (21), corresponding to an operating margin of 12.0 percent (5.9).
 
Profit after tax amounted to SEK 31 million (12), corresponding to SEK 0.90 (0.35) per share after dilution. Cash flow from operating activities was SEK 63 million (43). 
 
Nine-month period (September 2013-May 2014)
Net sales amounted to SEK 1,139 million (1,114), up 2.2 percent. Sales in comparable stores increased 0.9 percent. Adjusted for discount effects in the preceding year, like-for-like sales rose 2.7 percent (according to the Swedish Retail Institute Index, the market contracted by 0.7 percent).
 
The gross margin was 56.6 percent (56.5). Operating profit totaled SEK 97 million (46), corresponding to an operating margin of 8.6 percent (4.1).
 
Profit after tax amounted to SEK 70 million (26), corresponding to SEK 2.02 (0.75) per share after dilution. Cash flow from operating activities was SEK 118 million (72).
 
Events during the third quarter
MQ’s brand portfolio was strengthened in March with the addition of three new brands: Sail Racing, Ilse Jacobsen and A-One. One store in Malmö was closed: Malmö Entré.
 
Events after the end of the reporting period
No significant events occurred after the end of the reporting period. MQ is one of Sweden’s leading retailers of fashion brands. Through a select mix of proprietary and external brands, MQ offers men’s and women’s clothes with a high fashion content in attractive stores. The store chain currently comprises 121 stores and the aim is to establish. MQ as the leading retailer of fashion brands in the Nordic region. 
 

MQ Holding AB
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