IC Companys Q1 FY'14 gross margin declines 1.3%

Consolidated revenue for Q1 2013/14 amounted to DKK 1,052 million which is at the same level as Q1 2012/13.

The unchanged revenue development compared to Q1 2012/13 comprises two opposing, yet expected, trends; growth in the Premium segments and revenue setback in the Mid Market segment. The Group’s gross margin amounted to 56.0% for the quarter under review compared to 57.3% in Q1 2012/13. The operating profit for Q1 2013/14 amounted to DKK 159 million.

Revenue from the Premium Outdoor segment, which comprises the brand Peak Performance, rose by 2% to DKK 344 million (DKK 336 million) which is attributable to satisfactory growth in sales to wholesale customers, yet affected by a disappointing performance in the retail channel.

The Premium Outdoor operating profit amounted to DKK 69 million (DKK 76 million). This setback in the segment’s operating profit is primarily driven by higher costs for development of e-commerce and retail distribution.

Revenue from the Premium Contemporary segment, which comprises the brands Tiger of Sweden and By Malene Birger, rose by 8% to DKK 342 million (DKK 316 million). This achieved growth was particularly attributable to insourcing of Tiger of Sweden’s accessory line as well as the segment’s wholesale channel.

The Premium Contemporary operating profit for Q1 2013/14 amounted to DKK 54 million (DKK 56 million) and was affected by higher costs in connection with e.g. insourcing of Tiger of Sweden’s accessory line, higher marketing costs as well as continued development of the segment’s retail channel.

Revenue from the Mid Market Contemporary segment suffered a setback of 13% to DKK 234 million (DKK 270 million) which was as expected. The Mid Market Contemporary operating profit rose to DKK 21 million (DKK 14 million) primarily as a consequence of the implemented restructurings and cost saving measures.

The Group’s gross margin declined by 1.3 percentage points compared to Q1 2012/13. This decline is partly attributable to a higher exchange rate of the Group’s primary sourcing currency (USD) compared to last financial year. In addition to this, the gross margin for Q1 2012/13 was positively affected by a large-scale clearing of products out-of-season.

The capacity costs were reduced by DKK 6 million to DKK 430 million corresponding to a cost rate of 41%.

Operating profit amounted to DKK 159 million (DKK 165 million) corresponding to an EBIT margin of 15.1% (15.7%). After having adjusted for costs incurred in Q1 2013/14 in connection with changes to the Executive Board, the operating profit amounted to DKK 169 million corresponding to an EBIT margin of 16.1%.

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IC Companys