Signa Sports United (SSU), which continues to be hampered by supply chain issues within its full-bike segment, grew first-quarter revenues by 10.6 percent to €213 million due to strong sales gains within its tennis (+43 percent) and outdoor equipment (+20 percent) segments. Excluding sales of full bikes, first-quarter revenues climbed by 15 percent year-over-year, and excluding the recent addition of Wiggle Chain Reaction Cycles (WiggleCRC), the U.K.-based bike e-commerce platform, sales were up by just 3.5 percent.
The gross margin dropped by 0.3 percentage points to 37.1 percent. Adjusted Ebitda declined to a loss of €11.7 million from a profit of €9.6 million posted one year earlier on higher customer acquisition investments, logistic costs and normalized personnel expenses. After reorganization costs of €120.8 million, the group posted an operating loss of €170.1 million versus operating income of €800,000. The net quarterly result was a net loss of €165.0 million against a loss of €1.4 million. To help restore profitability, the company plans to reduce marketing expenses, which represented 9.9 percent of first-quarter net revenue.
The leading German-based sports e-tailer, which recently went public on the New York Stock Exchange, completed the acquisitions of Wiggle CRC in the U.K. and Tennis Express in the U.S. in December 2021, but figures from the latter were not included in the quarterly results. Still, Signa says it made inroads in the U.S. tennis market during the period. It also grew in the core DACH and Southern European regions as it expanded the number of bike and outdoor stores connected to its internet platform to about 500 doors and opened flagship Tennis Point stores in France, Italy and Spain. Wiggle CRC, which generates approximately 40 percent of its topline in international markets, is seen as complementary to the group’s former bike business.
SSU continued to engage more consumers. Active customers have risen by more than 76 percent over the last 12 months to 7.4 million. The total number of visits to its sites increased by 31.2 percent to 84.6 million over the period, leading to a jump in net orders of 62.1 percent to 2.4 million. The Average Order Value (AOV) declined by 1.3 percent due to lower bike sales.
The group’s CEO, Stephan Zoll, called 2022 “a challenging environment to navigate,” particularly as it relates to the bike supply chain due to raw material, parts, and transportation issues. He said SSU would return to organic growth in the third quarter once its bike business begins to normalize. The company has maintained its guidance for pro forma revenues in a range of €1,400 to €1,550 million for the full year ending Sept. 30.
The group’s business priorities for the current fiscal year include building the foundations for a new marketplace launch by the end of the calendar year, further penetrating the U.S. market, consolidating its strong position in key European markets, and leveraging an expanded fulfillment network to better service key markets. Calling itself a “natural consolidator,” SSU believes it’s well-positioned for further activity in mergers and acquisitions. Near-term priorities will be focused on achieving topline synergies from WiggleCRC and expanding its portfolio of directly owned brands.
