May was a disaster for Kappahl which comes out of its third financial quarter with a 5.9 percent decrease in sales.
”Customers do not buy shorts, swimwear and dresses when the summer weather is delayed,” says CEO Johan Åberg.
KappAhl’s net sales for the quarter amounted to 1,132 (1,201) million SEK, a decrease of 5.7 per cent. The development is explained by the effect of new and closed stores. Gross profit for the quarter was SEK 699 (753) million, which corresponds to a gross margin of 61.7 (62.7) per cent.
CEWO Johan Åberg comments that May was a disappointment regarding both the development of sales and earnings which affected the whole third quarter.
”In Sweden and Norway we are following the industry trend and we see a stabilisation of the operational area in Finland. In Poland we continue to have an unwanted development and further measures will be started in the fourth quarter aiming at immediate change of the trend. Shop Online sales continue to increase in importance.”
”In working on our plan for KappAhl we are at a stage where maintaining the current high pace is of importance. ”
During the spring, Kappahl converted and reopened fifteen stores with the new store concept, For You. The stores stay open during the conversion with limited sales, which has had a negative impact on total sales. In total Kappahl now have 24 stores with the new store concept.
”Customers do not buy shorts, swimwear and dresses when the summer weather is delayed. However, the new Glenn Strömberg Collection for men has sold well. Also the sustainable collection “Dreams through a Lens”, in collaboration with Mary McCartney, the home furnishing collection Newbie Home and Vintage Stories have been successful,” says Johan Åberg.
In November Kappahl will open the first stand-alone store for the Hampton Republic 27 brand and a second store for the Newbie baby collection in the Mall of Scandinavia in Stockholm. The launch of the new Cosmetics business area will be in late winter.
|Third quarter (March-May)||Nine months (September-May)|
|Net sales, SEK million||1 132||1 201||-69||3 439||3 558||-119|
|Operating profit, SEK million||42||101||-59||146||203||-57|
|Gross margin, %||61.7||62,7||-1,0||61.0||61,4||-0.4|
|Operating margin, %||3,7||8,4||-4,7||4,2||5,7||-1.5|
|Profit after tax, SEK million||23||42||-19||81||97||-16|
|Earnings per share after dilution, SEK (Note 1)||0.30||0,56||-0,26||1.06||1,29||-0.23|
|Cash flow from operating activities, SEK million||194||271||-77||357||345||12|