The crazy weather also penalizes the business of some companies. Geox knows something about it, the well-known footwear brand, mostly summer, which pays dearly the unusually cold climate in April and above all in this first part of May: considering this factor, CEO Matteo Mascazzini explained, sales will not be able to pick up again as expected, after a sluggish first quarter, albeit substantially in line with analysts' forecasts.
This is the reason for the Geox shares fall on the Stock Exchange (-12% around midday, to 1,37 euro), after last Friday the well-known footwear brand founded by Mario Moretti Polegato and now led by Mascazzini had released the data for the first quarter of 2019, which showed that the consolidated revenues amounted to 260,9 million euros, down by 1,3% (-1,6% at constant exchange rates). But it is not so much this figure that worries investors, as the forecasts for the next quarter.
“April went badly and May is also disappointing”, admitted the managing director, commenting on the results in a conference call. “What was lost in these six weeks will not be recovered and to achieve the consensus expectations in terms of growth in turnover and Ebitda, a strong contribution from sales will be necessary in the coming months of the year”, confirmed the Equita analysts, reducing the forecast on 2019 turnover by 0,6% to 835 million and on the Ebitda of -3% to 57 million. Equita also advises caution on shares (Hold), with a price target of 1,5 euros (below today's 1,4).
What is worrying, therefore, is the trend in sales, which already closed in the first quarter in chiaroscuro: if it is true that sales in owned stores, compared to the same period of the previous year, rose by 3,4%, and those online by 25%, they are instead particularly bad sales of the franchise, down by -12,9% due to channel optimization, with 10% of stores closing or converting.
“The trend in the quarter – explained Mascazzini – highlighted a positive trend in comparable sales of directly managed stores, especially in the online channel, which was offset by the decline in the multi-brand channel and in franchising respectively impacted by the rationalization in progress, aimed at reinforcing the solidity of the business and supporting the brand image, and by optimizing the distribution presence”. The number one of Geox admitted the difficulty in carrying out the plan: "In the face of still difficult markets and decidedly important challenges, it becomes even more critical to pursue the objectives set by the 2019-2021 Strategic Plan with determination".
