Peak Performance,which is now the only brand in the new Premium Outdoor segment of IC Companys, had largely stable results in the first half of its financial year, ended last Dec. 31. Sales of 565 million Danish kroner (€75.7m-$102.3m) for the period were only one million kroner higher than in the corresponding period a year ago, in spite of a relatively warm winter in the Nordic countries.
Satisfactory growth in sales to wholesale customers contrasted with disappointing retail sales for Peak Performance. During the second quarter, a drop in the brand's retail sales to DKK95.2 million (€12.8m-$17.2m) – comprising own stores, factory outlets and e-commerce - led to a 3 percent drop in its sales during the second quarter to DKK222 million (€29.7m-$40.2m). The gross margin improved during the first half of the financial year, thanks in part to fewer discounts. The operating margin (Ebit) fell slightly to 16.2 percent from 16.4 percent in the year-earlier period, but excluding structural adjustments, it reached a nice level of 16.7 percent.
Across the group, IC Companys reported an overall sales decline of one percent to DKK1,775 million (€237.9m-$321.4m) for its continuing operations, with a 12 percent increase in its Premium Contemporary segment (Tiger of Sweden, etc.), contrasting with a 16 percent decline in the Mid-Market Contemporary segment. The Nordic countries represented 69 percent of the revenues. Changes in foreign currencies negatively affected the total turnover by DKK40 million (€5.4m-$7.2m), but benefited production costs.
The gross margin remained stable for the group at 57.1 percent, but the operating margin (Ebit) improved to 10.5 percent from 9.8 percent in the year-ago period. Adjusting for costs incurred in connection with the recent changes in the group and its brand management, the operating margin actually reached a level of 11.3 percent. After accounting for the losses from discontinued operations, net earnings rose to DKK136.8 million (€18.3m-$24.8m) from DKK114.6 million.
The company predicts that its Premium brands will continue their positive development, generating solid growth rates for the full year based on the order intake so far, and that earnings will increase in all segments. Investments will be made to expand the distribution in the group's two Premium segments.
