With strong results in fourth quarter Baltika Group ends the year in profit
With strong sales results in retail and e-commerce, Baltika Group ended the fourth quarter with a net profit of 920 thousand euros, which exceeds the result of same period last year by 300 thousand euros. Net profit growth was mainly driven by Baltic retail markets with 2% sales growth in the fourth quarter compared to the fourth quarter of last year. In the fourth quarter Group’s revenue was almost 13 million euros, showing 2% increase compared to same period last year.
Baltic region retail business recovered after the three quarter long period of decrease and resulted in 2% sales growth in the fourth quarter compared to the fourth quarter of last year. In November and December the offer of autumn-winter season collection, including Monton´s birthday and Olympic collections, brought visitors back to shopping centres. Sales growth was supported by increase both in sales transactions and in average spend. In year total retail sales amounted to 39,5 million euros, decreasing 1% compared to last year. „In the fourth quarter, one of the important projects in retail was opening a pop-up store in Finland, which allows us to monitor the perspective of entering a new market,“ comments Meelis Milder the development of retail business.
Wholesale and franchise revenue decreased 7% in the fourth quarter and was 0,86 million euros. Wholesale and franchise revenue growth was supported by recently added market Serbia and Peek & Cloppenburg department stores chain in Germany and Austria. The fourth quarter sales revenue decreased mainly due to complicated economic situation of Eastern-European franchise partners and smaller demand for new orders. While franchise sales decreased in the fourth quarter, then the wholesale increased and one of the growth reason was successful sale of PyeongChang Olympic collection to the partners. In year total the wholesale and franchise revenue increased 5% and was 6,3 million euros.
Baltika Group’s e-store Andmorefashion.com revenue increased 38% in the fourth quarter and was 0,43 million euros. Total of 7,300 orders from 31 counties were received in the fourth quarter. In year total, the e-store Andmorefashion.com revenue increased 38% and was 1,47 million euros.
Besides good results in retail and e-store sales, Meelis Milder emphasis strong economic indicators: „Implementing the more conservative cost policy and efficient inventory management process together with more favourable input conditions in the second half-year, recovered the gross profit growth at the end of year and led to the highest gross profit margin earned in a quarter in last five years“. The company’s gross profit margin in the fourth quarter was 54.9% increasing by 3.1 percentage points in a year. The gross profit for the quarter was 7,1 million euros, increasing by 0,5 million euros compared to last year’s comparable result. The year total gross profit amounted to 23,7 million euros.
In year total, Baltika’s revenue increased 1%. The e-store and wholesale and franchise revenue showed growth; with that one of the company’s objectives for 2017 – revenue growth in all of the sales channels – was partly met. In spite of the weak result of nine months, which was caused by poor sales and decreased gross profit related to deeper discounts in retail sector, with the contribution of strong fourth quarter company managed to end the year in profit. Company ended the 2017 with a profit of 58 thousand euros, last year profit was 177 thousand euros.
Baltika Group is the largest fashion design enterprise in the Baltics that assembles five successful international fashion brands – Monton, Mosaic, Ivo Nikkolo, Baltman, and Bastion. The retail network of Baltika includes 95 stores in Estonia, Latvia, Lithuania and Finland. In addition, purchases of all five fashion brand collections can be made at the online store at andmorefashion.com, which delivers to 44 countries. Thanks to franchise and wholesale partners, the fashion brand collections of Baltika created by Estonian designers are sold all across Europe, including in the most long-standing and valued European chain of clothing stores Peek & Cloppenburg. The Baltika Group is listed on the Tallinn Stock Exchange that belongs to the NASDAQ OMX Group.