Brief: XXL Q2 EBIT At NOK 2.2 Bln, Co To Downsize Several Existing Stores

Xxl AS

15/07/2022 06:12

July 15 (Reuters) - XXL ASA  XXL.OL :
    * XXL EXPERIENCED A DECELERATING SALES DEVELOPMENT AND JUNE
PROVED
TO BE A CHALLENGING MONTH
    * STRATEGIC REVIEW OF AUSTRIAN OPERATIONS CONTINUES AND XXL
HAS
DECIDED TO CLOSE ONE STORE IN Q1 2023 AS WELL AS INTENTION TO
MOVE OUT OF CENTRAL WAREHOUSE FACILITY OUTSIDE VIENNA DURING
2023
    * LONGER-TERM TARGET IS "40-30-10" ON GROSS MARGIN, OPEX AND
EBITDA RESPECTIVELY AND WHEN EXCLUDING IFRS 16 EFFECTS 
    * LOWER REVENUE AND PROFIT DRIVEN BY WEAKENING CONSUMER
SENTIMENT
AND REDUCED DEMAND FOR SPORTING GOODS 
    * TO CUT COSTS, WE REDUCE PURCHASES AND ADJUST STAFFING IN
STORES
TO REDUCED CUSTOMER TRAFFIC 
    * Q2 OPERATING REVENUE NOK 2.2 BILLION VERSUS PRELIM ABOUT
NOK 2.2
BILLION AS REPORTED ON JUNE 14
    * XXL IS NOT SATISFIED WITH RESULTS AND HAS INITIATED
SEVERAL
SHORT-TERM ACTIONS TO ADJUST COSTS AND PURCHASING VOLUMES TO
SALES TREND
    * Q2 EBITDA NOK 191 MILLION VERSUS PRELIM RANGE NOK 190-220
MILLION AS REPORTED ON JUNE 14
    * WE WILL TURN EVERY STONE TO SAVE MONEY WHERE WE CAN ACROSS
WHOLE
COMPANY
    * IN ADDITION TO ENSURE THAT WE ARE COST EFFICIENT, WE WILL
ALSO
PRIORITIZE TO STRENGTHEN OUR MARGINS
    * AMONG OTHER THINGS, WE SEEK TO INCREASE PROPORTION OF
PRIVATE
LABEL BRANDS FROM 10 TO 30 PERCENT
    * IN A NORMALIZED MARKET, WE AIM FOR A GROSS MARGIN OF 40
PERCENT
    * TOTAL CAPEX FOR XXL GROUP IN 2022 IS EXPECTED TO BE AROUND
NOK
200-250 MILLION
    * XXL WILL BE DOWNSIZING SEVERAL EXISTING STORES, MAINLY IN
SWEDEN
    * GROUP WILL CONTINUE TO FOCUS ON OPTIMIZING STORE PORTFOLIO

Further company coverage:  XXL.OL 

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