SMCP - 2024 Q1 Sales
2024 first quarterPress release -
Paris, April 25th, 2024
Q1 sales down by 5% in a
macroeconomic environment that remains
challengingDetailing the action plan to deliver
growth and profitability
First quarter sales
- Q1 2024 sales
at €287m, decreasing by -5% on an organic basis vs Q1 2023, against
strong comparables.
- Good
performance in America, resilience in Europe (excl. France) and
slow consumption in China
- Sandro and
Maje slight organic growth excluding China
- Maintained
stringent discount rate policy, with a 2 points improvement of the
in-season discount rate, mainly in Europe and North America
- On-going
network optimization with 11 net closings during the quarter,
mainly in Asia to reach 1,719 points of sales worldwide
Details and targets of mid-term action plan,
based on four key priorities:
- Get back to
profitable growth and gain market shares
- From 2026
onward, once the network is optimized, get back to a mid-single
digit sales CAGR
- EBIT margin
c.10% in 2026 and c. 12% by 5-years
- Rebalance
geographical footprint
- Retail:
network optimisation with c.100 closings of dilutive stores, mainly
in China over the 2 coming years
- Wholesale:
acceleration of the expansion, through partnerships
- Gain in
agility and leverage on technological innovation to improve
efficiency to deliver profitability
- Increase the
Group’s negotiating leverage on all types of expenses
- Action plan
rollout from 2024, with progressive effects, to reach €25m
additional EBIT in 2026
- Protect cash
to deliver a sound financial structure
- Asset light
investments based on a selective approach
- Free-cash-flow
generation of €50m in 2026
Commenting on these results, Isabelle
Guichot, CEO of SMCP, stated: « As anticipated, our
first quarter remained on a similar trend to that seen in the
second half of 2023. We are satisfied with our performance in the
United States and our resilience in Europe, except in France, where
consumer spending remains volatile. In Asia, our business continues
to be affected in China by low in-store traffic, while our sales
are dynamic in South-East Asia. During the first quarter, we
continued to implement our medium-term action plan, and over the
coming months we expect to fully benefit from our global geographic
footprint and accelerating performance in high-potential regions.
We also expect to gain from our latest technological investments
(particularly in digital technology) to achieve greater efficiency,
and to continue our disciplined management to ensure profitable
growth and a solid financial structure»
€m
except % Unaudited figures |
Q1 2023 |
Q1 2024 |
Organicchange |
ReportedChange |
Sales by region |
France |
106.0 |
98.2 |
-7.4% |
-7.4% |
EMEA |
88.6 |
89.4 |
+0.1% |
+0.9% |
America |
39 .0 |
42.0 |
+8.9% |
+7.7% |
APAC |
71.0 |
57.3 |
-15.7% |
-19.4% |
Sales by Brand |
Sandro |
146.0 |
140.4 |
-2.9% |
-3.8% |
Maje |
113.8 |
108.9 |
-3.2% |
-4.3% |
Other
brands1 |
44.8 |
37.5 |
-16.4% |
-16.2% |
TOTAL |
304.6 |
286.8 |
-5.0% |
-5.8% |
SALES BY
REGION
In France, sales reached €98m
in the first quarter, down -7% on an organic basis vs Q1 2023,
which marked a record (Q1 2023 was +13% up vs Q1 2022). The trend
in the first quarter 2024 was in line with Q4 2023, but saw an
improvement following the end of the official sales period for
Sandro, Maje and Fursac, thanks to a good reception of their
Spring/Summer collections. While B&M sales were resilient with
a nearly flat like-for-like performance for Sandro and Maje,
digital sales decreased, impacted by a strong basis of comparison
in 2023, especially for Claudie Pierlot.
In EMEA, sales amounted to
€89m, in line with Q1 2023. This good performance, given the high
basis of comparison, was driven by the South of Europe, especially
in brick & mortar. The quarter was tougher in the UK, in the
continuity of Q4 2023. Retail partners registered a good
performance, especially in the strategic markets (Middle East and
Turkey). Apart from the temporary impact of a few relocations
currently under process, the network remained relatively
stable.
In America, sales were up by
+9% organic vs Q1 2023, at €42m. The region signs the best
performance of the Group. The US and Mexico recorded a very good
performance for both brands Sandro and Maje. Sales in Canada
continued to improve sequentially through the quarter and have been
back to a positive trend since February. In line with the Group’s
strategy of geographical rebalancing, the network increased by 3
net openings in Q1.
In Asia Pacific, sales at €57m
decreased by -16% on an organic basis vs Q1 2023, with a very
polarized situation across the continent. While in Greater China,
sales continue to be strongly affected by low traffic in malls, the
Group delivered a good performance in South-East Asia (strong
double-digit positive in Singapore, Malaysia, Thailand, and
Vietnam). To be noted also the first delivery of Fursac merchandise
to our South Korea partner. As expected, the network decreased with
10 net closings in China, as initially planned.
CONCLUSION AND
PERSPECTIVES
After a year 2023 impacted by a challenging
macroeconomic environment, and the first quarter of 2024 following
the same trend, the Group provides today more details on its
mid-term action plan, articulated around four key priorities:
1. Reboost growth and
gain market shares
- Continue to
work on brand desirability and enhance brand relevance and
positioning by reaffirming the place and role of each brand within
the portfolio of SMCP: expressing identity, cultivating strategic
“raison d’être”, reinforcing the specificities of each brand and
developing complementarity while reducing overlap
- Optimize
collection architecture and product merchandising, by simplifying
merchandising, sharpening collection architecture in stores and
boosting the men segment
- Maximize
product offer beyond Ready-to-wear by reinforcing existing lines
(bags, shoes, and glasses) and by developing new opportunities
(beauty, perfume, lifestyle, home, travel and experience)
- Transform
digital challenges into opportunities to reboost sales, reaffirm
omnichannel leverage and regain profitability
- These
initiatives lead to a mid-single digit sales CAGR from 2026
onwards, once the network is optimised
2. Leverage global
exposure
- On the retail
network, the geographical footprint has been rebalanced between
regions. In North America, the network is returning to growth in
key areas in the US. In Europe, the network will remain largely
stable in the mid-term with some selective optimizations (in
Northern Europe and for Claudie Pierlot), some qualitative
relocations and flagship openings in capitals. In Greater China,
the network will decrease by 15-20% in 2024 (40 DOS) and should
continue to be optimized in 2025, to improve productivity. In
South-East Asia, qualitative openings are scheduled to capitalize
on the momentum of those markets. In total, the hundred of closings
are mainly scheduled in 2024 and 2025
- Regarding the
non-retail network, the acceleration of development with partners
is a proven way to explore markets which could otherwise be
challenging to penetrate directly, and with a relative effect on
EBIT margin. Mid-term target is to open 40 to 50 sales points per
year to increase the non-retail share mix by 5 points, from 8% to
13% of Group sales
3. Gain in agility and
leverage on innovation to improve efficiency to deliver
profitability
- Optimize
production process to enhance Gross Margin by implementing stricter
and more transversal buying process for raw materials and
components (leverage Group negotiations, rationalize suppliers’
portfolio, review contractual terms), while respecting each brand’s
DNA and style asperities
- Accelerate on
sustainable innovation by mutualizing the reservation of
sustainable raw materials and fibers between brands to assess the
potential of innovative materials
- Reinforce
technical innovation and leverage artificial intelligence
- Be more agile
on Claudie Pierlot’s and Fursac’s development by twisting business
models to boost profitability:
- By reviewing
Claudie Pierlot’s existing operating model: optimisation of the
network with 30 closings by mid-term in Europe and Asia and
capitalize on strong digital penetration
- By
concentrating Fursac’s development on department stores (low capex,
traffic driver and variable costs structure)
4. Protect cash to
deliver a sound financial structure
- The initiatives
detailed above will enable the Group to progressively improve the
EBIT by €25m until 2026; thanks to savings in all costs categories:
- Production
costs: more transversality in raw materials and components
purchases and leveraging Group negotiations with a rationalized
suppliers’ portfolio
- OPEX: rent
optimisation in stores (renegotiations) and in HQ, adjustment of
staff costs, particularly in China; reviewing indirect purchases
(IT, logistics, etc.) by a renegotiation of contract terms;
lowering weight of D&A by optimising investments
- The Group’s
5-year target remains to reach c.12% of EBIT margin (and to reach
c.10% in 2026)
- The priority is
given to the most relutive investments to optimize free-cash-flow
generation, reach €50m in 2026, and accelerate net debt
reduction
Management remains fully committed to delivering
the action plan and expects effects by mid-term.
NEXT
EVENTS
June 6th, 2024 – Annual Shareholders’
Meeting
July 25th, 2024 (post market close) –
Publication of 2024 first semester results
A conference call with
investors and analysts will be held today by CEO Isabelle Guichot
and CFO Patricia Huyghues Despointes, from 9:00 a.m. (Paris
time).
Related slides will
also be available on the website (www.smcp.com), in the Finance
section.
APPENDICES
Breakdown of DOS
Number of DOS |
Q1-23 |
2023 |
Q1-24 |
|
vs.2023 |
vs.Q1-23 |
|
|
|
|
|
|
|
By
region |
|
|
|
|
|
|
France |
456 |
470 |
473 |
|
+3 |
+17 |
EMEA |
391 |
411 |
410 |
|
-1 |
+19 |
America |
164 |
176 |
177 |
|
+1 |
+13 |
APAC |
305 |
316 |
304 |
|
-12 |
-1 |
|
|
|
|
|
|
|
By
brand |
|
|
|
|
|
|
Sandro |
569 |
591 |
586 |
|
-5 |
+17 |
Maje |
476 |
490 |
488 |
|
-2 |
+12 |
Claudie
Pierlot |
203 |
210 |
209 |
|
-1 |
+6 |
Fursac |
68 |
82 |
81 |
|
-1 |
+13 |
Total DOS |
1,316 |
1,373 |
1,364 |
|
-9 |
+48 |
Breakdown of POS
Number of POS |
Q1-23 |
2023 |
Q1-24 |
|
vs.2023 |
vs.Q1-23 |
|
|
|
|
|
|
|
By
region |
|
|
|
|
|
|
France |
457 |
471 |
473 |
|
+2 |
+16 |
EMEA |
505 |
555 |
549 |
|
-6 |
+44 |
America |
196 |
215 |
218 |
|
+3 |
+22 |
APAC |
477 |
489 |
479 |
|
-10 |
+2 |
|
|
|
|
|
|
|
By
brand |
|
|
|
|
|
|
Sandro |
733 |
775 |
767 |
|
-8 |
+34 |
Maje |
611 |
640 |
636 |
|
-4 |
+25 |
Claudie
Pierlot |
223 |
233 |
234 |
|
+1 |
+11 |
Fursac |
68 |
82 |
82 |
|
- |
+14 |
Total POS |
1,635 |
1,730 |
1,719 |
|
-11 |
+84 |
o/w Partners POS |
319 |
357 |
355 |
|
-2 |
+36 |
FINANCIAL INDICATORS NOT DEFINED IN
IFRS
Number of points of sale
(POS)
The number of the Group’s points of sale
comprises total retail points of sale open at the relevant date,
which includes (i) directly operated stores (DOS), including
free-standing stores, concessions in department stores,
affiliate-operated stores, outlets and online stores, and (ii)
partnered retail points of sale.
Organic sales growth
Organic sales growth is the total sales in a
given period compared to the same period in the previous year. It
is expressed as a percentage change between the two periods and is
presented at constant rates (sales for period N and period N-1 in
foreign currencies are converted at the average rate for year N-1)
and excluding the effects of changes in the scope of
consolidation.
Like-for-like sales growth
Like-for-like sales growth corresponds to retail
sales from directly operated points of sale on a like-for-like
basis in a given period compared with the same period in the
previous year. Like-for-like points of sale for a given period
include all of the Group’s points of sale that were open at the
beginning of the previous period and exclude points of sale closed
during the period, including points of sale closed for renovation
for more than one month, as well as points of sale that changed
their activity (for example, Sandro points of sale changing from
Sandro Femme to Sandro Homme or to a mixed Sandro Femme and Sandro
Homme store). Like-for-like sales growth percentage is presented at
constant exchange rates.
***
METHODOLOGY NOTE
Unless otherwise indicated, amounts are
expressed in millions of euros. In general, figures presented in
this press release are rounded to the nearest full unit. As a
result, the sum of rounded amounts may show non-material
differences with the total as reported. Note that ratios and
differences are calculated based on underlying amounts and not
based on rounded amounts.
***
DISCLAIMER: FORWARD-LOOKING STATEMENTS
Certain information contained in this document
includes projections and forecasts. These projections and forecasts
are based on SMCP management's current views and assumptions. Such
forward-looking statements are not guarantees of future performance
of the Group. Actual results or performances may differ materially
from those in such projections and forecasts as a result of
numerous factors, risks and uncertainties. These risks and
uncertainties include those discussed or identified under Chapter 3
“Risk factors and internal control” of the Company’s Universal
Registration Document filed with the French Financial Markets
Authority (Autorité des Marchés Financiers - AMF) on 5 April 2024
and available on SMCP's website (www.smcp.com).This document has
not been independently verified. SMCP makes no representation or
undertaking as to the accuracy or completeness of such information.
None of the SMCP or any of its affiliate’s representatives shall
bear any liability (in negligence or otherwise) for any loss
arising from any use of this document or its contents or otherwise
arising in connection with this document.
ABOUT SMCP
SMCP is a global leader in the accessible luxury
market with four unique Parisian brands: Sandro, Maje, Claudie
Pierlot and Fursac. Present in 46 countries, the Group comprises a
network of over 1,600 stores globally and a strong digital presence
in all its key markets. Evelyne Chetrite and Judith Milgrom founded
Sandro and Maje in Paris, in 1984 and 1998 respectively, and
continue to provide creative direction for the brands. Claudie
Pierlot and Fursac were respectively acquired by SMCP in 2009 and
2019. SMCP is listed on the Euronext Paris regulated market
(compartment A, ISIN Code FR0013214145, ticker: SMCP).
CONTACTS
|
|
INVESTORS/PRESS
|
|
|
|
SMCP
|
BRUNSWICK |
Amélie
Dernis |
Hugues Boëton |
|
Tristan Roquet Montegon |
+33 (0) 1 55 80 51
00 |
+33 (0) 1 53 96 83 83 |
amelie.dernis@smcp.com |
smcp@brunswickgroup.com |
1 Claudie Pierlot and Fursac brands
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