Wolford losses widen but it sees pathway to "sustained profitability"
Wolford’s full-year 2022 figures showed sales rising but, as previously flagged, its profitability didn’t improve and it remained loss-making.
Sales rose 15% to €125.5 million, while the EBIT loss widened to €28.6 million from €5.2 million a year earlier. The net loss was €34.9 million, also wider than the €12.33 million loss of the previous year.
The positive sales growth was a result of “increased investments in effective marketing activities, on-trend designer collaborations, as well as the impact of Wolford‘s new focused and elevated product proposition of iconic styles and smart seasonal assortments”.
It saw revenue growth across all DTC channels with retail and online growing 28% and 7%, respectively. Meanwhile wholesale dipped 1% “despite the cyber attack we had at our third-party logistics warehouse”.
In the US, Wolford saw “particularly strong development” of 44%+ on the sales front, and in EMEA sales grew by 9% “notwithstanding the war”. In the APAC region Wolford “slightly exceeded the previous year’s level despite the lockdowns in China”.
But the company added that “despite immediate cost-cutting corrective actions, the significant earnings erosion of H1 2022 could not be slowed sufficiently from when the new management board took over in August 2022”.
The company faced “largely one-off events and expenses in 2022” of €9.3 million that negatively impacted EBIT for the full year.
It added that “multiple measures have been taken by the new management board to increase operational efficiency by accelerating and broadening Wolford‘s restructuring efforts with a significantly greater focus on cost control”.
And in February, a capital increase of €17.6 million was implemented to boost liquidity.
Such measures should start to show in the results for the current year and and have already impacted Q1 with sales coming in above budget, plus “cash flow and earnings [are] on track to finally deliver sustained profitability”.
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