During the last eight weeks the Group has experienced a significant slowdown in consumer demand affecting both Q1 2011/12 and the expectations for remaining quarters of the financial year 2011/12. Consolidated revenue for Q1 2011/12 suffered a setback of 3% to DKK 1,175 million. Operating profit amounted to DKK 147 million corresponding to a reduction of 36% and the EBIT margin amounted to 12.5%. Management has expedited a number of measures to counter the pressure on the Group’s earnings.
Consolidated revenue for Q1 2011/12 amounted to DKK 1,175 million (DKK 1,216 million) which is a decrease of 3% compared to last financial year.
Wholesale revenue amounted to DKK 813 million (DKK 842 million) and retail revenue amounted to DKK 362 million (DKK 374 million) corresponding to a 3% setback in both segments.
Gross profit amounted to DKK 670 million (DKK 722 million). The Group thus generated a gross margin of 57.0% (59.4%).
Capacity costs amounted to DKK 523 million (DKK 495 million) corresponding to an increase of 6%. The cost rate for Q1 2011/12 thus amounted to 44.5% (40.7%).
Operating profit amounted to DKK 147 million (DKK 227 million). The Group thus generated an EBIT margin of 12.5% (18.7%).
Order intake for the spring collection 2012 is expected to record a setback of 5%.
In the brand Peak Performance a new management team was appointed together with targeted efforts on optimising the internal processes.
Based on the performance for the financial year 2010/11, the Board of Directors expects to grant 110,471 warrants to 16 other executive employees.
Outlook for 2011/12
Management anticipates that the challenging market conditions characterised by high volatility and reduced visibility will continue and as a consequence hereof, the assumptions for the remaining three quarters of the financial year have thus changed significantly. The market is still expected to be affected by declining consumer spending and thereby consequently high campaign activities.
The Group will thus continue to focus on sales through, e.g., campaigns resulting in a downward impact of the Group’s gross margin.
This development has led to an acceleration of further structural changes which will improve earnings by DKK 50 million when fully implemented. Non-recurring costs of DKK 23 million are expected to be recognised in Q2 2011/12.
Furthermore, a general cost reduction has been effectuated leading to a cost level for the remaining of the financial year 2011/12 expected to be below the level for the financial year 2010/11.
Management expects the consolidated revenue for the financial year 2011/12 to attain a level of DKK 3.9 – 4.0 billion (previously announced outlook of DKK 4.1 – 4.3 billion) and the operating profit after non-recurring costs of DKK 23 million for the financial year 2011/12 to attain a level of DKK 250 – 300 million (previously announced outlook of DKK 360 – 410 million).
Investments for the financial year 2011/12 are expected to attain a level of DKK 90 – 110 million (previously announced outlook of DKK 90 – 120 million) primarily for an expansion of the distribution and sales promoting improvements of the IT platform.
Copenhagen, 9 November 2011
For further information, please contact:
Chief Executive Officer
Phone: +45 3266 7721
Chief Financial Officer
Phone: +45 3266 7017