Claiming that it has become the largest sports retailer in the Nordic countries, XXL ASA reported a 32 percent increase in total operating revenues to 1,369 million Norwegian kroner (€160.9m-$180.2m) for the first quarter ended March 31. The company's move into Finland was responsible for 43 percent of the growth. E-commerce jumped by 75 percent across the group and represented 7.5 percent of the total turnover.
Operating earnings before amortization (Ebitda) went up at a similar rate of 31 percent, reaching NOK 95 million (€11.2m-$12.5m), resulting in an Ebitda margin of 6.9 percent, in spite of a decline in the gross margin to 37.3 percent from 38.8 percent in the same quarter a year ago. Changes in currencies affected the results negatively by NOK 21 million (€2.5m-$2.8m). The company turned around to a net profit of NOK 34 million (€4.0m-$4.5m) from a loss of NOK 10 million in the year-ago period.
On a same-store basis, the group's revenues were 4.3 percent higher than in the first quarter of 2014. With a new store opened in Finland on March 24, the total number of the group's stores went up to 45 at the end of the latest quarter from 35 a year earlier. It increased from 22 to 23 in Norway, from 13 to 17 in Sweden and from 0 to five in Finland.
Clearance sales, the late arrival of winter in Norway in February and lack of snow in Sweden until the end of January, all affected gross margins and the group's growth on a comparable store basis during the quarter. Same-store growth amounted to 5.9 percent in Norway, thanks mainly to higher traffic in its stores. It reached 2.3 percent in Sweden, where the market is estimated to have grown by 2.1 percent during the quarter.
XXL's total sales went up by 12.4 percent to NOK 813 million (€95.5m-$107.0) in Norway, delivering an improved Ebitda margin of 17.5 percent of sales. In Sweden, sales rose by 32.5 percent to NOK 412 million (€48.4m-$54.2m), and the Ebitda margin increased to 3.2 percent from 1.9 percent. Sales in Finland amounted to NOK 144 million (€16.9m-$18.9m) in the quarter, but the Ebitda margin remained negative at 2.3 percent.
A sixth store was opened in Finland on April 14. XXL has signed seven more leases for the balance of the year, but one of the openings may be postponed to 2016.