Sports retailer XXL warns on profits amid weak demand (updated)

Xxl AS

14/06/2023 12:11

(Adds detail on outlook, share move)
       OSLO, June 14 (Reuters) - Norwegian sports retailer XXL
 XXL.OL  warned on Wednesday of a second-quarter loss due to
weak demand, sending its shares down 6.4%.
        Revenue from continued operations in the second quarter
is expected at 1.9 billion Norwegian crowns ($179.12 million)
down from 2.1 billion a year ago, driven by weak consumer
sentiment and reduced demand for sporting goods in general, XXL
said.
  
        "The market is characterized by high inventory levels in
the whole value chain, resulting in aggressive pricing and
excessive campaigns," the company added.
  
        Gross margin will likely drop to 30%-32% from a year-ago
37.9%, with a loss before interest, tax, depreciation and
amortisation of between 25 million and 75 million crowns in the
quarter, down from a year-ago profit of 205 million.
  
        XXL said it had been granted temporary deferral of tax
payments in Sweden, boosting its cash position by 345 million
Swedish crowns, although the full amount must still be paid in
monthly instalments in 2024.
        "XXL expects to be in compliance with its .... financial
covenants and is in constructive dialogues with its lending
banks," the company said.
  
        
  
    ($1 = 10.6075 Norwegian crowns)
  

 (Reporting by Terje Solsvik, editing by Gwladys Fouche and
Louise Rasmussen)
 ((stine.jacobsen@thomsonreuters.com; +45 21 56 90 10;))