Geox profitable again over the first nine months of its financial year

By

Dominique Muret

Published
Nov 19, 2014

Geox has confirmed the positive signs seen at the beginning of the year, recovering a steady rhythm over the first nine months, particularly in Italy, its biggest market, and once again seeing profits.

The new strategy focused on shoes, the group's core activity, product innovation, cost reduction, the closure of less profitable stores, and the improvement of the commercial structure in Northern Europe and in Asia, has brought about the desired effect.

Between January and September 2014, the Italian shoewear brand recorded revenue up 8.1% (+8.8% at a constant exchange rate) compared to the same period a year earlier, at 668.4 million euros (534 million pounds). The nice surprise was Italy, which remains Geox's top market (33.8% of total revenue), where sales went up 13.6% to 225.8 million.

In the rest of Europe, sales went up 8.5% to 294.8 million, while Stateside they dropped 1% and remained stable (+0.6%) in the other parts of the world, the company stated in a press release.

The "shoe that breathes" also recorded good performances in its single-brand stores. Thus, sales made via the 467 branches over the first nine months of the year jumped 24.1% to 252.6 million (on a comparable basis, the increase was nearly 9.4%). At the franchises, sales went up 2.4%. However, they were down 0.6% at the multi-brand stores, but did start to see a profit once again in the third quarter by jumping 13.1%.

On 30 June 2014, Geox had a total 1248 points of sale. During the first nine months of the year, 119 stores were closed in the framework of a rationalisation plan of the sales network, compared to 68 new openings.

From a profitiblilty point of view, the company has clearly regained ground. Geox has advanced from a net loss of 8.4 million euros as of 30 September 2013 to a net profit of 4.5 million a year later.

The operational result (EBIT) and gross operating income (EBITDA) also greatly improved over the same period, respectively increasing from an operating loss of 4.3 million to a surplus of 15.6 million and an EBITDA of 31.1 to 46.3 million.

In this context, management remains confident for the rest of the year and confirms the objectives of its industrial plan, aimed at returning to a balance of its operating result and 800 million in revenue for 2014.

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