XXL ASA, citing challenging winter conditions in January and February despite a promising start to the winter season in late 2021, reported a net loss of 175 million Norwegian kroner (€15.4m) in the first quarter ended March 31. Ebitda declined 64 percent to NOK 75 million (€7.6m) from NOK 207 million.

Revenues dipped 8.4 percent to NOK 1,984 million (€202.3m) from NOK 2,166 million. E-commerce sales fell 19.4 percent year-over-year to represent 23.3 percent of group operating revenues against 26.3 percent. Sales growth in local currency increased in Austria (+24.3 percent) but fell in its Norwegian home market by 6.0 percent and also in Sweden (-13.4 percent) and Finland (-13.8 percent). Group gross margin slipped to 38.0 percent from 40.4 percent on higher freight costs and clearance activities.

Besides unfavorable weather, results were also negatively impacted by store closures in Norway and Austria due to Covid-19 restrictions. But those lost store sales were made up with increased online revenues. XXL, which saw strong December sales of skis, skates and apparel abate as the calendar turned to 2022, said it gained market share in all countries despite the weather. Spring conditions in March brought growth in all markets, the company said.

Going forward, XXL, which had 92 stores in operation at the end of the first quarter, intends to develop “an ambitious e-commerce growth strategy,” improve its category strategy and plans and strengthen product availability for its customers. Current store expansion plans are for 3 to 5 stores annually, including a new door in Norway and two in Sweden this year. Additionally, XXL intends to shutter outlet stores in Töcksfors and Nordby, Sweden and also downsize several existing stores in the country. The company’s 2022 capital expenditure budget is currently estimated at NOK 250 million to 300 million (€25.5m to €30.6m).

On the personnel front, XXL has appointed Markus Solvik, who previously worked in various positions for Norwegian home improvement retailer Løvenskiold Handel, as its EVP of strategy, sustainability and business development. Solvik, also a former management consultant for Boston Consulting Group, begins his new position in the third quarter.

XXL - Consolidated income
Quarter ended March 31 (NOK million)
  2022 2021 % change
Norway 981 1,027 -4.5%
Sweden 540 646 -16.4%
Finland 344 409 -15.9%
Austria 119 85 40.0%
Net revenues 1,984 2,166 -8.4%
Cost of goods 1,230 1,290 -4.7%
Personnel expense 465 468 -0.6%
Other operating expense 215 201 7.0%
Depreciation 202 190 6.3%
Net financial expense -48 -54 -11.1%
Pre-tax -175 -38 -360.5%
Tax 23 -1
Net -151 -39 -287.2%
NOK/share (diluted) -0.60 -0.15 -300.0%
Source: XXL
XXL - Revenues & EBITDA margins
Quarter ended March 31 (NOK million)
  2022 2021 % change
Norway
Revenues 981 1,027 -4.5%
EBITDA margin 17.0% 20.4% -3.4 pp
Sweden
Revenues 540 646 -16.4%
EBITDA margin 4.7% 11.2% -6.5 pp
Finland
Revenues 344 409 -15.9%
EBITDA margin 8.5% 17.6% -9.1 pp
Austria
Revenues 119 85 40.0%
EBITDA margin -1.8% -19.6% 17.8 pp
TOTAL
Revenues 1,984 2,166 -8.4%
EBITDA margin 3.8% 9.5% -5.7 pp
Source: XXL