Globe International, the Australian-based multi-brand skate company, saw its net income soar during its fiscal first half, partly due to a favorable comparison base with the same period last year, when the U.S. introduced extra tariffs and the strengthening U.S. dollar weighed on profits. The group also benefitted from good economic conditions in Australia and New Zealand, since these countries resisted better to the Covid-19 pandemic than most nations.
Globe’s net income for the six months ended Dec. 31 reached 15.3 million Australian dollars ($9.9m-$11.0m), up sharply from AU$3.9 million for the same period a year ago, in spite of lower extaordinary gains.
Sales jumped by 60 percent to AU$124.8 million (€80.8m-$97.2m), fueled by the brands Impala, FXD, Globe and Salty Crew, with double-digit growth recorded across all the regions where the group operates.
Sales progressed everywhere despite Covid-19 restrictions in place across the world, which the group attributed to a momentum behind its brands, its global spread, a diverse category mix and growing online sales.
North America was the fastest-growing area with sales climbing by 82 percent to AU$41.9 million (€27.1m-$32.6m). Australasia, Globe’s largest region, rose by 55 percent to AU$65.7 million (€42.5m-$51.2m). Europe saw a lower 37 percent improvement in sales to AU$17.3 million (€11.2m-$13.5m), but its operating results turned around to a profit of AU$2.9 million (€1.9m-$2.3m).
The group’s gross margin jumped by 5.6 percentage points to 43.2 percent, driven by higher online sales, a weaker U.S. dollar and a shift in the product mix toward higher-margin hardgoods.
The management said its decision to focus on its main outdoor brands paid off. Last year, it sold U.S.-based Dwindle to Highline Industries, with Globe International retaining distribution rights for the brand in Australia, New Zealand, the U.K. and Spain. The brands marketed by Dwindle include Almost, Blind, Dusters California, Kryptonics and Enjoi.
Globe explained that the sale of this business division was part of an ongoing strategic overhaul of the group’s brand mix, aimed at reducing the number of smaller brands in its global operations, while giving the company a much better balance of apparel, footwear and skateboard hardgoods brands proportionate to the revenues of each product category.
Looking ahead, Globe expects sales to remain strong in the second half of its fiscal year, depending on a reliable supply of products, primarily from China. Profitability is also expected to remain high, but lower than in the first half of the year, as investments are being made to fuel the continued growth in sales. The gross margin should be a few basis points lower due to increased landed costs and a different sales mix.