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Beskrivning
| Land | Sverige |
|---|---|
| Lista | Small Cap Stockholm |
| Sektor | Handel & varor |
| Industri | Detaljhandel |
"During the fiscal year 2019, Sportamore passed one billion in sales. In the fourth quarter, we show the strength of our business model and are gaining market share in all Nordic geographies in a challenging market characterized by extremely hot weather and high campaign intensity. At the same time, we are in no way satisfied with the outcome of the period and planned for and acted to achieve increased sales through a series of projects and efforts. One of the biggest changes we made was shifting search engine marketing provider. The purpose was to improve our yield, increase the degree of automation and ensure scalability - this is something that we still believe to be right, but we were in this case unable to achieve results quickly enough, which had a major negative impact on our business during the first two months of the quarter and as a result, we chose to reverse the decision and go back to our trusted solution, which was re-implemented in December and then ramped up in January. Total sales for the quarter amounts to MSEK 319 (322), which means that the corresponding figure for the full year totals MSEK 1,053 (953), an increase of 11 per cent.
Increasing order value and greatly improved gross margin
The profitability shift that was introduced during the third quarter continued to deliver results in the fourth quarter as well. This was manifested by an increase in average order value by five per cent to SEK 576 (547) - despite the fact that capital-intensive winter goods in the period accounted for a lower proportion than in the normal case. Thus, the potential for further improvement is good. Furthermore, the gross margin increased two percentage points compared to the same period last year and amounts to 36.5 (34.6) per cent.
EBIT for the period amounts to MSEK 2 (9) or 0.5 (2.8) per cent. Adjusted for the increased marketing costs, earnings for the quarter still improved by 0.3 percentage points despite lower sales and challenging macro conditions.
Scalable organization and infrastructure for growth under improved profitability
Sportamore continues to work to ensure that we can grow with profitability. Infrastructure and working methods are continuously iterated to be robust and designed for scalability and duplication. We continue our work to automate all repetitive elements and processes. One direct effect of this is that operating expenses excluding marketing and cost of goods sold continue to decrease from 25.9 per cent in the third quarter to 23.2 per cent during the period.
Marketing costs as a proportion of sales are negatively affected as a result of shifting search engine marketing provider - a measure that we had to carry out twice during the period. In addition to this, as a result of the warmer weather and consequently lower demand for capital-intensive winter goods, resulted in lower return on investments from marketing efforts during the fourth quarter.
Focus on core markets
We are still see the potential of geographical expansion with our scalable model, but we will ensure satisfying profitability potential in our core markets before we continue to roll out new geographies. This also means that the French market will be ramped up at a slower pace than previously planned.
Saleable stock despite the mild winter
Stock levels are of course affected by the mild winter and as a direct result from this, the stock turnover rate has not increased as planned. The stock is still saleable, with only 22 per cent originating from previous seasons. We do not see that the season's weather has caused a greater risk of stock obsolescence, but rather consider any remaining winter goods as less optimal capital tied up in anticipation of the upcoming winter season. Against this background, we still take a number of measures to ensure that we do not build up unnecessary stock by working together with our suppliers to adjust incoming volumes, return unsold goods and / or exchange for more fast-selling products. In addition to this, and as part of our streamlining work, we're also reviewing our product range structure with the ambition to focus more towards strategic suppliers and our core categories. It is our ambition to increase our stock turnover rate significantly and we expect to do so during this year, primarily by continuing to increase sales in relation to stock, but also by reducing the stock size in absolute terms."
Johan Ryding,
Sportamore
This information is information that Sportamore AB (publ) is obligated to disclose pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted, through CEO Johan Ryding, for publication on February 17th 2020 at 07:30 CET.