Tendam: Q1 2018/19 results

26 / July / 2018

Tendam: Q1 2018/19 results

26 / July / 2018

Gross margin and operating costs continue to improve in the period March-May 2018. As of May 2018, stocks are down 3.5% year-on-year.

E-commerce is up 21.5%. The store network registered a net variation of +15 new points of sale in the quarter.

Adjusted EBITDA for the last 12 months amounts to €165.6 million versus €141.1 million in the same period one year earlier.

Tendam, one of Europe’s leading fashion retailers operating in the specialised chain segment through the Cortefiel, Pedro del Hierro, Springfield, women’secret and Fifty brands, has today announced its results for the first quarter of its 2018/19 financial year, which runs from 1 March to 31 May 2018.

Tendam CEO Jaume Miquel said: “In Q1 2018 we have continued to follow the road map of our strategic plan by increasing investment in a bid to strengthen our brands, drive digitalisation, enhance CRM and accelerate expansion in key markets. Our management efficiency criteria has continued to underpin our actions, resulting in significant margin improvements and a reduction in stock levels.

Adjusted EBITDA LTM[1] amounts to €165.6 million, versus €141.1 million in the same period one year earlier. EBITDA for Q1 2018/19 was €18 million, versus €22.4 million in the same quarter the previous year. In turn, revenues for the last 12 months have remained stable against the comparable period (€1.1457 billion versus €1.1506 billion), with the company posting Q1 revenues of €221.3 million versus €230.3 million in the same period the previous year. The Q1 results were constrained by Easter falling at an earlier date, summer season products registering lower sales and the negative FX impact.

E-commerce has seen significant growth in sales (+21.5%) during Q1 2018/19, mainly driven by the Cortefiel and Springfield brands with growth in the region of 25%. As at 31 May, the e-commerce channel accounts for 6.6% of Tendam’s total sales, versus 5.2% upon close of the same month one year earlier.

At quarter end, club sales – with over 22 million cardholders across all of the group’s brands – represent 78% of the total sales (+2p.p.). These cardholders are a key asset to Tendam’s business and provide the company with a clear competitive advantage.

“Key CRM and digital transformation projects accelerate over the coming months. In terms of CRM, which is one of Tendam’s distinguishing assets, the work tailored towards leveraging personalisation, multi-club and multi-channels is of particular note. We are looking to engage more with our cardholders and have the tools and team to do so. In the digital area, e-commerce will be extended in H2 to new strategic markets and the company’s directly-operated stores – through click shopping – in our key markets” added CEO Jaume Miquel.

Between March and May 2018, the gross margin continued its improvement trend by rising 0.2% (from 67.3% to 67.5%). The company’s continued cost control and efficiency approach is reflected in operational costs savings of 1% (€1.1 million). Active stock management has led to a positive reduction of €7 million, -3.5% versus May the previous year. The company’s financial situation continues to improve with an increase in free cash flow after interest of €36.7 million versus the same period one year earlier.

Tendam’s expansion plan is fully under way, with a net variation in points of sale of +15 in Q1 2018/19. As at 31 May 2018, Tendam’s store network comprises 2,002 points of sale (versus 1,988 in February), of which 1,195 are directly-operated stores, 690 franchise operations and 117 department store corners. The company is present in 91 countries.

[1] LTM: Last Twelve Months

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