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%.
Unchanged outlook for continuing operations for 2013/14
The Group’s Premium brands are expected to continue the positive development and generate solid growth rates for 2013/14. As a consequence of the challenges in the Group’s Mid Market segment, which is expected to suffer a revenue setback, the total consolidated revenue growth for 2013/14 is expected to be modest.
However, earnings are expected to be improved in all segments and the total consolidated earnings are consequently expected to increase significantly compared to DKK 157 million realised in 2012/13.
Investments for the financial year 2013/14 are expected to attain a level of DKK 70-90 million primarily for an expansion of the distribution in the two Premium segments.
At the Annual General Meeting 2013 a resolution was adopted recommending DKK 2.00 per ordinary share, corresponding to a total dividend of DKK 33 million, in respect of the financial year 2012/13 to be distributed as dividend to the shareholders. Furthermore, during the financial year 2013/14 Management expects to distribute DKK 100 million through a combination of share buy-back and extraordinary dividend.
Copenhagen, 13th November 2013
IC Companys A/S
Mads Ryder, Group CEO
Tine Knarreborg, Acting Chief Financial Officer