Outlook

Outlook for 2016/17

We expect to realize a revenue growth rate measured in local currency of at least 6%. Based on the current exchange rates of the Group’s primary sales currencies (primarily SEK, NOK and GBP), this corresponds to a reported revenue growth rate of at least 5% (unchanged).

Revenue growth is expected to be driven by sales in both the wholesale channel as well as the retail channel. At present, we have solid insight into the wholesale revenue for the remainder of the financial year 2016/17, and based on this, we expect a pre-order growth rate of approx. 7% for the remainder of the financial year. In addition, we expect to open 15-20 new stores as opposed to 10-15 stores as announced at the beginning of the financial year.

During Q1 2016/17 we have experienced a negative revenue development in our physical stores driven by lower traffic compared to Q1 2015/16 whereas we have seen some improvements in sales and consequently same-store growth at the beginning of Q2 2016/17. For the remainder of the financial year, a flat same-store revenue is expected.

However, we still see a risk of a tough and challenging retail climate for the remainder of the financial year resulting in a potential negative impact on high-margin revenue from the physical stores as well as the supplementary sales to wholesale customers during the season. In such case, this will put pressure on the Group’s gross margin and have a negative effect on the cost ratio.

Consequently, we now expect the Group’s EBIT margin to attain a level of approx. 8-9% for the financial year 2016/17 (previously: “approx. 9%”).

Investments for the financial year 2016/17 are expected to attain a level of approx. 3-5% of the annual revenue (unchanged). These investments are undertaken to maintain existing assets – including store furniture and equipment – as well as in connection with new store openings (leasehold improvements and if necessary key money).

Outlook for 2016/17 Realized 2015/16 Previous guidance Current guidance Status
Revenue growth measured in local currency 1.9% At least 6% At least 6% Unchanged
Revenue growth measured in reporting currency (DKK) 1.0% At least 5% At least 5% Unchanged
EBIT margin 9.1% Approx. 9% 8-9% Changed
CAPEX (in % of full-year revenue) 3% 3-5% 3-5% Unchanged

Last update: November 15, 2016