The sports e-commerce company Signa Sports United (SSU) is undergoing a strategic realignment assessment to generate long-term shareholder value that it intends to reveal at the end of Q2 but is projecting an ongoing challenging environment through the remainder of the FY due to inflationary pressures impacting both consumer sentiment and discretionary spending. SSU is forecasting “significant” year-over-year gross margin contraction in H1/FY23 as inventories are lowered by €30 to €40 million.
In Q1, the German parent of WiggleCRC and TennisExpress, among others, realized a 698-basis point decline in gross margin to 29.6 percent due to higher markdowns that were needed to reach target inventory levels in overstocked categories at the lower end of the bike market.
SSU revenues rose by 27 percent year-over-year to €246 million from €194 million in Q1 as the group improved its long-term active customer base by 26 percent to 6.3 million, net orders by 30 percent to 2.0 million and total website visits by 13 percent to 62.6 million. Average order value (AOV) jumped by 8 percent year-over-year to €103.70.
“The challenging market conditions from the second half of FY22 have continued to deteriorate in the seasonally slow winter months, as expected,” CFO Alex Johnston said in a statement. “We anticipate the competitive environment to persist until the higher inventory levels, in particular in the bike market, have cleared, and inflationary pressures ease.”
