Weak sales performance for Geox

Worldwide
Published:  19 November, 2018

The Italian casual footwear brand said its consolidated results for the first nine months of 2018 confirm the weak sales performance already reported earlier this year.

Between January and September, Geox’s total sales amounted to €672.4 million, down -8.2% at current exchange rates and -7.7% at constant. The manufacturer has attributed the decline in sales to “extremely unusual weather conditions” across all the Group's main regions, including “an exceptionally cold March” that delayed the start to the spring-summer season and a rather warm start to the Autumn season, affecting Winter collection sales. Geox recorded a continuing downward trend in footfall in stores in the period, attributed to factors such as “a widespread drop in consumer confidence in all the main markets caused by certain economic-political issues”; increased competition, mainly in the sportswear industry, moving into the casual and urban style segments; and the increasing growth in e-commerce to the detriment of physical store networks.

Geox’s sales declined -8.7% in Europe (-10.6% in home market Italy) to €290.6 million, and -14.7% in North America to €37.4 million. Footwear sales represented 90.4% of consolidated sales in the period, amounting to €607.9 million, down -7.8% year-on-year.

The Company said it needs to accelerate future investments and develop its business model in order to meet the demands of a “market and consumer base that has changed and continues to change at an ever-increasing rate”. In this respect, the Group has launched “in-depth strategic, organisational and distribution review project”, which aims to break away from the past while remaining fully “in line with the Brand’s history and values”.

For the full year, Geox expects a decrease in annual turnover in the range of -6- -7% and a level of profitability, not including special items (Ebitda adjusted), of approximately 5% on sales.