Tendam posts €43m profit in the first nine months of the year
today Jan 28, 2019
Spanish fashion group Tendam, and its brands Cortefiel, Pedro del Hierro, Women’s Secret, Fifty and Springfield, returned to profitability in the first nine months of the financial year ended 30 November 2018. In the first three quarters, the company saw its profits rise to over €43m ($49m).
Tendam’s results revealed on Monday that the company made a pre-tax profit of €43.4m ($49.6m) in the first nine months of the financial year compared with losses of €13m ($15m) in the same period the prior year.
Group sales reached €247.3m ($282.7m) in the third quarter, while revenues totalled €801.7m ($916.7m) in the nine-month period. This was down 1.1% on the same period last year.
According to a press release, the company attributed the mixed performance to two different trends: “a first-half impacted by the reorganisation of the store portfolio carried out in Spring Summer 2017, adverse weather conditions and negative currency effects; and a third quarter with sales growth, significant improvement in gross margin and improvement in EBITDA by 41.8%”.
Meanwhile, online sales increased by 26.4% during March and November 2018 across all brands. Tendam said online purchases accounted for 7.8% of total sales in the Iberian peninsula at the end of the period.
The group’s EBITDA in the first nine months reached €104.1m, representing an increase of 2.6% over the same period last year. Additionally, Tendam noted a 0.3% improvement in gross margin to 63.5% in the three quarters thanks to a rigorous cost saving and efficiencies programme. The company also highlighted that it reduced its stock inventory by €1m compared with 2017 through an active management strategy.
In terms of Tendam’s financial health, its cash flow improved by €50.1m in the nine months compared with November 2017. The group also reduced its financial expenses by €40.3m after restructuring its debt.
Tendam’s net debt stood at €500.2m during the period, with debt-to-Ebitda ratio ending at 3.1. In the first three months of the year, Tendam repurchased its debt for for €30m, and made further repurchases for €60m after period end.
Tendam is the third largest clothing retailer in Spain after Inditex and Mango. In the first nine months of the financial year, the group continued to expand its store estate with 71 new openings compared with November 2017. Currently, Tendam has about 2,042 stores in 91 countries, including 1,231 directly owned stores, 690 franchised sites and 121 concessions.
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