Signa Sports United (SSU), battling worsening consumer sentiment in Europe and persistent bike/e-bike shortages as headwinds, expanded second-quarter revenues by 47.5 percent to €269.0 million from €182.0 million. The increases were aided by including results from its recent WiggleCRC and Tennis Express acquisitions (closed on Dec. 14 and Dec. 31, 2021, respectively) that also bolstered a 55 percent increase in net orders to 2.2 million. The supply chain constraints within the bike segment helped drag the average order value (AOV) down 4.0 percent to €101.7. The company is beginning to see improvement in the inventory flow of complete bikes, but it currently does not project a normalization of the e-bike supply chain until FY23. On a pro forma basis, Q2 tennis sales were up 33 percent and increased 25 percent in the bike segment.
| Signa Sports United - Income | |||
|---|---|---|---|
| Second quarter (€ million) | |||
| 2022 | 2021 | Change | |
| Net revenue | 268.7 | 182.2 | 47.5% |
| Cost of materials | 171.1 | 110.7 | 54.6% |
| Other operating expenses | 77.7 | 45.9 | 69.3% |
| Operating loss | 51.1 | 6.7 | 662.7% |
| Finance income | 12.6 | 0.0 | – |
| Finance costs | 2.1 | 2.1 | 0.0% |
| Pre-tax | -40.9 | -9.1 | -349.5% |
| Tax | 4.2 | -1.5 | – |
| Net | -36.7 | -10.5 | -249.5% |
| Source: Lululemon | |||
Period gross margin declined to 36.3 percent from 39.3 percent on heightened promotional activity and increased marketing costs that were utilized to offset the headwinds. The adjusted Ebitda loss was €17.0 million against a profit of €4.0 million. The operating loss was €51.1 million against a loss of €6.7 million and includes €13.4 million in depreciation and amortization. Net income declined to a loss of €36.7 million against a loss of €10.5 million in the year-ago period.
SSU, which has secured additional liquidity of up to €200 million with lenders via an amendment to its credit revolver, continues to engage more customers. Also, its largest shareholder in Signa Holding GmbH has agreed to provide it with up to €100 million in working capital. Year-over-year active customer growth was up 64.4 percent to 7.4 million consumers from 4.5 million, with the trailing 12 months described as equally divided between new and returning customers.
The leading German-based sports etailer has confirmed its financial year 2022 outlook that was first laid out on May 3. It calls for annual revenues of between €1,250 million and €1,400 million and an adjusted Ebitda margin of between 0.0 percent and -3.0 percent. The guidance assumes ongoing inventory shortages of bio-bikes and e-bikes that will prevent SSU from meeting market demand but a resumption of double-digit sales growth once supply chain pressures wane. Meanwhile, SSU’s new logistics center serving DACH and Southern Europe has gone online, and the company’s marketplace platform is on track to launch in Q4.
In the U.S. market, where SSU has installed a new senior management team, market demand is described as robust, with the consumer “in better shape” than counterparts across continental Europe, where inflationary pressures and geopolitical concerns have heightened.
