Odd Molly International AB (publ)
Stockholm, Sweden, October 24, 2017
July 1 – September 30, 2017
- Total operating revenue amounted to SEK 134.5 million (137.6), a decrease of 2 percent.
- The gross profit margin was 53.0 percent (53.8).
- Operating profit amounted to SEK 6.6 million (18.8), negatively affected by one-off costs of SEK 4.8 million for termination and buyouts of agents and organizational changes.
- Net profit amounted to SEK 4.9 million (14.0).
- Earnings per share amounted to SEK 0.85 (2.43).
- Total operating revenue amounted to SEK 342.6 million (336.7), an increase of 2 percent.
- The gross profit margin was 54.5 percent (54.5).
- Operating profit amounted to SEK 6.6 million (24.8), negatively affected by one-off costs of SEK 4.8 million for termination and buyouts of agents and organizational changes.
- Net profit amounted to SEK 2.9 million (16.9).
- Earnings per share amounted to SEK 0.51 (2.94).
January 1 – September 30, 2017
- Total operating revenue amounted to SEK 342.6 million (336.7), an increase of 2 percent.
- The gross profit margin was 54.5 percent (54.5).
- Operating profit amounted to SEK 6.6 million (24.8), negatively affected by one-off costs of SEK 4.8 million for termination and buyouts of agents and organizational changes.
- Net profit amounted to SEK 2.9 million (16.9).
- Earnings per share amounted to SEK 0.51 (2.94).
Comment from the CEO
Change requires change
Market
I ended my comment in the six-month report by saying that Odd Molly was preparing for more big changes in the market. And the trend we have seen toward a tough, discount-driven market is continuing. The strong sales we had in the retail segment at the end of the second quarter were not followed up in the same way in the third quarter. The growth rate in our own channels was lower than before, partly due to tough comparables in the same period last year, while we on the other hand saw a smaller drop in sales in the wholesale segment. The Group’s revenue as a whole decreased by 2 percent in the quarter.
Investments weigh on quarterly results
In the Q2 report we also said that we have to stay open to change and ensure that we free up resources to invest where we see the biggest potential for profitable growth. During the quarter we made a number of changes in our organization and among the agents that represent Odd Molly internationally. In the distribution network we have made several shifts and replaced our agents in Germany, France and Austria, while we are also evaluating a new solution in the UK. The new agents have a strong presence among customers and channels with the strongest development in the respective market, and we look forward to new collaborations while at the same time we have respect for the time it takes for new agents to turn around the development in a market. The internal organizational changes increase our international and digital focus. These proactive measures impact the result in the quarter by one-off costs amounting to SEK 4.8 million. Due to the extra costs, combined with lower sales, profit for the quarter decreased considerably from last year.
Changes continue
We continue to invest in e-commerce and see our physical stores as an important brand identifier with profitability requirements. We have hired a new Creative Director with responsibility for developing the brand, adapted the sales organization for international expansion in all channels, and established a new category strategy more optimized for each channel. We are adapting the way we work and the organization, and are constantly looking for efficiencies and savings where we see opportunities.
As part of the effort to create a steady flow of news in our lifestyle concept, we will soon launch Odd Molly’s first skiwear collection – a collection that feels just right in terms of the sustainability of the materials and production process we use as well as its design and comfort. Odd Molly’s socks are other nice additions to the assortment and our new underwear is performing well and reaching new distribution.
Odd Molly is changing with the market and new consumption patterns, so we have to be both quick and long-term. We are working continuously to adapt to changes and have reached several important milestones. 2017 will be a year in which we take measures that have cost money in the short term, but that support our goals: to strengthen our position in the Nordic region and expand Odd Molly’s lifestyle concept internationally.
Anna Attemark, CEO