XXL is continuing its ambitions on delivering the "Reset & Rethink" plan, which
is progressing well. However, sales development in the second quarter has been
disappointing, driven by low sales of capital-intensive goods in general and
bikes in particular. Early signs of market recovery are seen in mainly Sweden
and partly also Norway and pockets of category growth are seen cross all
markets, mainly in trending categories, soft goods and low price points in
general. XXL will have full focus ahead on turning around sales development in a
continued challenging and campaign driven market.
XXL delivered negative year over year growth of 9 percent in the second quarter
2024, and total operating revenue amounted to NOK 1.8 billion (NOK 1.9 billion).
Especially soft goods and consumables as well as products on lower price points
have increased in demand, while more capital-intensive products have continued
to be in clear decline. Limited product availability on important price points
and products in high demand continued to hold back sales potential as well.
However, Sweden is showing early signs of improvement in both May and June,
while Finland remained to be the most challenging of the three markets
throughout the quarter.
EBITDA is year over year improved by NOK 96 million and amounted to NOK 39
million (negative NOK 57 million), mainly driven by a strengthened gross margin.
XXL also concluded both a successful and oversubscribed NOK 500 million private
placement as well as a subsequent offering of NOK 60 million in the quarter.
Highlights:
-Disappointing revenue development holding back full EBITDA improvement, but
positive gross margin trend
- Total operating revenue of NOK 1 776 million (1 946 million)
- Gross margin of 35.7 per cent (27.6 per cent)
- EBITDA NOK 39 million (negative NOK 57 million)
-Successful and oversubscribed private placement of NOK 500 million and
subsequent offering of NOK 60 million to strengthen liquidity
-The "Reset & Rethink" strategy continuing to progress well
CEO Freddy Sobin says:
"We are delivering a quarter with disappointing sales, primarily driven by low
demand for capital-intensive goods, and with availability still lagging behind.
However, we have a stronger and growing gross margin, which has improved our
operating results. Our costs are increasingly under control, and we see a
positive top-line recovery from March through June. We are continuously moving
in the right direction in the implementation of the Reset & Rethink strategy,
with both Must Win Battles and restructuring going according to plan. Our
primary focus now is top line, to bring XXL back in shape by 2024/25".
Outlook
XXL is in the phase of implementing several strategic initiatives and projects
to improve profitability and operational efficiency moving forward, called
"Reset & Rethink". Five must win battles are expected to deliver an EBITDA
uplift of NOK 500-750 million during the next 12 months.
XXL's target and goal moving forward is to come back to sound profitability as
well as over time gain market shares in all markets and regain growth in the
E-commerce channel.
In line with the existing strategy, XXL will continue to mainly invest in
operational efficiency, store footprint optimization, customer experience
enhancing projects in both stores and in the E-commerce platform, as well as in
IT and tech. Total CAPEX for XXL Group in 2024 is expected to remain modest at
around NOK 100-150 million.
XXL has thus far no new store openings signed in 2024. Mid- to long-term XXL
continues to expect the pace of the store roll-out to be 2-3 new stores per year
including relocations of stores. At the same time XXL will be downsizing several
existing stores. Short term the Group will continue to focus on optimizing the
store portfolio, including evaluation of selective closures of low performing
stores with limited turnaround abilities.
For further information please find attached the quarterly report and the
presentation material.
For APMs please see the quarterly report for further definitions and
reconciliations.
The results will be presented at 08:30 CET by CEO Freddy Sobin and CFO Stein
Eriksen. The presentation will be held in English and will be webcasted at
www.xxlasa.com.
For further queries, please contact:
Investor Relations:
Tolle O. R. Grøterud
Phone: +47 902 72 959
E-mail: ir@xxlasa.com
Press:
Jan Christian Thommesen
Phone: + 47 918 21 387
Email: presse@xxl.no
This information is considered to be inside information pursuant to the EU
Market Abuse Regulation and is subject to the disclosure requirements pursuant
to section 5-12 of the Norwegian Securities Trading Act. This stock exchange
announcement was published by Tolle O. R. Grøterud, Investor Relations Officer
at XXL ASA, on 12 July 2024 at 07:00 CEST.
About XXL ASA
XXL is a leading sports retailer with stores and e-commerce in Norway, Sweden
and Finland. It is the largest among the major sports retailers in the Nordics.
XXL pursues a broad customer appeal, offering a one stop shop experience with a
wide range of products for sports, hunting, skiing, biking and other outdoor
activities. XXL's concept is to have the largest stores with the best prices and
the widest assortment of products, focusing on branded goods.