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IC Companys posts interim report for July'09-Mar'10
12 May '10
6 min read
Summary
Consolidated revenue for Q3 2009/10 remained unchanged and the trends seen in Q2 indicating progress in retail revenue and limited setback in wholesale continue. However, the development of the gross margin has been negative which is mainly attributable to an unfavourable development of the Group's sourcing and sales currencies. A more fierce competition has furthermore resulted in lower price points on selected products. The Group had anticipated foreign exchange movements and great efforts were carried out in order to minimize the effects on the gross margin. Measured on the underlying performance, the Group has reduced the extent of the setback with more than two thirds. In spite of many new retail store openings, the development of the Group's cost curve remains flat. All these factors combined resulted in a lower profit margin for Q3 2009/10.
Total consolidated revenue for Q3 2009/10 decreased by 1%. However, the Group's retail revenue increased by 14% which was primarily attributable to new store openings. The newly opened stores are still generating positive earnings at an early stage. Nevertheless, as a consequence of the lower gross margin, earnings were only improved marginally by 0.3 percentage points. Measured on the underlying performance, the Group's improved merchandise flow has, however, led to improved sales out of the stores and generated a same-store progress of 2%. The discounts and large amount of write downs, which influenced the retail revenue last year, have been reduced.
Revenue in the Group's wholesale channel has been reduced by 7% which was to be expected as it is primarily based on the order intake placed at a time where financial uncertainty was still predominant. It is therefore satisfying that the Group has achieved an increase in the revenue calculated from the loss of revenue from order intake to net revenue. In-season sales improved by 23% for Q3 2009/10. These two indicators support the fact that we believe that the wholesale segment is gradually improving.
The Group's franchise segment has experienced growth in Q3 2009/10 in spite of a number of franchise store closings during Q1 and Q2. The process in which the Group together with its partners is determining the correct concepts for the right locations has a positive effect on the Group's franchise revenue.
The Group's expansion of its own distribution has added considerably to the capacity costs. However, these costs are offset by the cost rationalisations effectuated during the last financial year. Yet, a modest reduction in the revenue has led to a higher cost rate. The target is that future growth should only lead to minor capacity cost increases for the Group and thereby improving the long-term cost efficiency.
Focus in the future will still be on value chain optimisation spanning from collection and design to the buying process, logistics and order suggestions. The Group has alreadyregistered improvements but must still work towards enhancing sales volume per style. In extension to this, the Group continues to work on professionalisation of the cooperation with its wholesale customers. In general the Group works towards changing its mindset in the direction of controlled space, brand exposure and order suggestions.
Click here for more details.
Consolidated revenue for Q3 2009/10 remained unchanged and the trends seen in Q2 indicating progress in retail revenue and limited setback in wholesale continue. However, the development of the gross margin has been negative which is mainly attributable to an unfavourable development of the Group's sourcing and sales currencies. A more fierce competition has furthermore resulted in lower price points on selected products. The Group had anticipated foreign exchange movements and great efforts were carried out in order to minimize the effects on the gross margin. Measured on the underlying performance, the Group has reduced the extent of the setback with more than two thirds. In spite of many new retail store openings, the development of the Group's cost curve remains flat. All these factors combined resulted in a lower profit margin for Q3 2009/10.
Total consolidated revenue for Q3 2009/10 decreased by 1%. However, the Group's retail revenue increased by 14% which was primarily attributable to new store openings. The newly opened stores are still generating positive earnings at an early stage. Nevertheless, as a consequence of the lower gross margin, earnings were only improved marginally by 0.3 percentage points. Measured on the underlying performance, the Group's improved merchandise flow has, however, led to improved sales out of the stores and generated a same-store progress of 2%. The discounts and large amount of write downs, which influenced the retail revenue last year, have been reduced.
Revenue in the Group's wholesale channel has been reduced by 7% which was to be expected as it is primarily based on the order intake placed at a time where financial uncertainty was still predominant. It is therefore satisfying that the Group has achieved an increase in the revenue calculated from the loss of revenue from order intake to net revenue. In-season sales improved by 23% for Q3 2009/10. These two indicators support the fact that we believe that the wholesale segment is gradually improving.
The Group's franchise segment has experienced growth in Q3 2009/10 in spite of a number of franchise store closings during Q1 and Q2. The process in which the Group together with its partners is determining the correct concepts for the right locations has a positive effect on the Group's franchise revenue.
The Group's expansion of its own distribution has added considerably to the capacity costs. However, these costs are offset by the cost rationalisations effectuated during the last financial year. Yet, a modest reduction in the revenue has led to a higher cost rate. The target is that future growth should only lead to minor capacity cost increases for the Group and thereby improving the long-term cost efficiency.
Focus in the future will still be on value chain optimisation spanning from collection and design to the buying process, logistics and order suggestions. The Group has alreadyregistered improvements but must still work towards enhancing sales volume per style. In extension to this, the Group continues to work on professionalisation of the cooperation with its wholesale customers. In general the Group works towards changing its mindset in the direction of controlled space, brand exposure and order suggestions.
Click here for more details.
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