Gerry Weber cuts profit outlook, blames negative market (updated)

Gerry Weber International AG

09/06/2015 17:51

(Adds further details, background) 
    BERLIN, June 9 (Reuters) - German fashion group Gerry Weber 
 GWIG.DE  no longer expects to meet its targets for revenue and 
earnings for its current year ending in October, it said on 
Tuesday, blaming a shrinking market and vowng to cut costs to 
try to get back on track. 
    The company said like-for-like sales fell 4.6 percent in the 
first half of the year, slightly outperforming a 5 percent drop 
in the German market, but still well short of its expectations. 
    Gerry Weber shares were seen down 5.3 percent in post-market 
trade having closed the official session down 0.7 percent at 
29.58 euros. 
    It said it was hit by unseasonal weather prompting higher 
markdowns, as well as falling shopper numbers in cities and a 
shift in spending by German consumers from fashion onto 
higher-priced items like cars, furniture and real estate.  
    The company said its earnings before interest and taxes 
(EBIT) would be 20-25 percent down on last year's result  
but said it was confident it would reach its  
long-term growth and earnings targets. 
    Analysts on average have been forecasting a 15 percent rise 
in EBIT to 125.16 million euros for the year ending Oct. 31, 
according to Thomson Reuters data. 
    The company also said on Tuesday it expected revenues for 
the group, which last year bought the Hallhuber chain of stores 
to complement its Gerry Weber and Taifun lines, to rise by a 
high single-digit percentage. 
    In March it had said it expects to add 50 to 60 new 
Hallhuber stores - which cater to younger female shoppers than 
its other chains - in the current financial year, up from 
previous plans for 37 outlets. 
    But it said on Tuesday that the expansion, as well as 
depreciation and amortisation resulting from the Hallhuber 
stores was weighing on profitability, with first-half EBIT down 
27 percent to 36.2 million euros  ($40.79 million). 
    It said it would stick to its expansion strategy but seek to 
cut general and administrative expenses as well as material and 
personal costs, adding it would give further details when it 
publishes full first-half results on June 12.  
($1 = 0.8875 euros) 
 
 (Reporting by Emma Thomasson; Editing by Greg Mahlich) 
 ((+49 30 2888 5081; Reuters Messaging: 
emma.thomasson.thomsonreuters.com@reuters.net)) 
 
Keywords: GERRY WARNING/