Signa Sports United’s third-quarter results were negatively impacted by deteriorating consumer sentiment and persistent supply chain issues for its bike and e-bike business. The Berlin, Germany company adapted operations in the wake of heightened inflationary pressures and a worsening geopolitical landscape in its core European markets.
The adjusted Ebitda loss was €13 million against a profit of €13 million as the gross margin slipped to 35.5 percent from 40.8 percent on higher promotional activity in the period ended June 30. The net loss was €52 million against a loss of €13 million. Bolstered by results from the WiggleCRC and Tennis Express acquisition, period revenues grew 29 percent year-over-year to €324 million from €251 million but were down 14 percent on a pro forma basis excluding the two firms. The U.S. tennis business will have an on-site presence at the U.S. Open this year to bring the first pro shop to the event’s 800,000 visitors.
Active customer growth was nearly 42 percent to 7.0 million as total visits to the website rose 16 percent to 84 million, and net orders increased 29 percent to 2.6 million. But the average order value (AOV) was down 3.6 percent to €101 during the quarter.
With the results, Signa updated its full-year outlook to a revenue target range of €1,150 to €1,200 million and an adjusted Ebitda margin of negative -4.0 to -5.5 percent. The company expects the current headwinds from wage growth and lower inflation to persist over the medium term, “absent any exogenous events.”
Meanwhile, an affiliate of the group’s largest shareholder, Signa Holding GmbH, is pumping €150 million worth of liquidity into the company to fund its organic growth and satisfy requirements under a May revolving credit facility agreement. Signa says it’s confident the additional liquidity will be sufficient to fund organic growth plans through the end of FY23.
