Norwegian sporting goods chain XXL warns that lower margins will cut into Q4 profits and has decided to launch a NOK 500 million (€47.9m) targeted share issue. The largest owner Altor, led by XXL chairman Hugo Maurstad, has committed to a NOK 119 million (€11.4m) contribution. The capital from the issue will be used to repay loans, XXL said in a statement. XXL has also decided to exit its venture in Austria after five years without profitability. Interim CEO Stein Eriksen calls the decision “sad but necessary.” The decision will be implemented in 2023.
Margins will be “significantly lower” as the company now focuses on liquidity, XXL said. According to habit.se, December started weak but improved as winter weather kicked in, after a sluggish and slow start in October. Black week sales were positive in all markets, but low gross margins continue to weigh on results. XXL now expects fourth-quarter sales of NOK 2.3 billion (€220.2m) to NOK 2.4 billion (€229.8m) and Ebitda earnings of NOK 50 million (€4.8m) to NOK 100 million (€9.6m) before adjusting for the cost of exiting Austria and possible inventory write-downs.
