After having declared a turnaround and reporting sales of €874.3 million for last year, less than €20 million short of the record level of €892.5 million posted in 2008, Geox said that it expects them to reach between €1,025 and 1,100 million in 2018. The target implies annual average growth of 6.5 percent over the next three years, driven by non-European markets.

In Italy, Geox anticipates that its sales will rise by around 3 percent a year to €300-320 million in 2018, with higher comparable store sales at mono-brand stores more than offsetting the ongoing rationalization of the retail network. The company also plans to achieve alliances with some strategic wholesale clients.

In the rest of Europe, revenues are forecast to go up by around 5 percent a year to €425-455 million in 2018. The growth will be driven by an increase in comparable store sales in its core markets of Iberia, France, Germany, Austria and Switzerland. Geox also plans to increase market penetration in Belgium and Luxembourg, where it says it enjoys a “healthy” brand awareness. It intends to boost its presence in the U.K., a competitive market with a strong potential for growth where it has yet to build up brand awareness.

In the Americas, the top line is seen rising by around 16 percent a year to €95-100 million, driven by wholesale expansion in the U.S. and Canada. The group is also planning the selective opening of directly-operated stores (DOS) there, while aiming for a high-single digit growth rate in comparable store sales.

In the rest of the world, Geox expects sales to rise by about 11 percent a year to €205-225 million by 2018, with a focus on China, where the group sealed two new distribution partnerships, as well as South Korea, Singapore and Indonesia. The group aims to add 40 DOS in this business area over the next three years, bringing the total to 140 stores, while bolstering the number of points of sale at wholesale by 700 to a total of 1,150 doors. Geox is also aiming to develop e-commerce in the region.

For the footwear segment of its global business, the group is forecasting an annual increase in sales of 7 percent to €925-990 million by 2018 with a focus on innovation and new products. The group claims to be investing the equivalent of 2 percent of its revenues in research and development. It expects to expand further in the northern European countries thanks to the ongoing development of its fall/winter collection, which has already grown to represent 45 percent of total sales in 2015 against 38 percent in 2012.

In apparel, revenues are expected to rise by 6 percent a year to €100-110 million. The group has set up a specialized sales force to market its apparel collection.

Soft-pedalling the establishment of new stores, the company sees the wholesale segment growing faster than its retail network going forward. Geox predicts that its wholesale revenues will enjoy annual growth of about 9 percent, up to a range of €445-480 million in 2018. Its retail revenues would remain higher by then at a level of €580-620 million, after rising at annual rate of 5 percent. The management noted that its wholesale business is more profitable than retail, meaning that group's overall profitability will be lifted by the channel's stronger growth.

The group is not budgeting any significant expansion of its mono-brand store network, where most of the growth will come from Asia, especially China. The number of Geox stores is forecast to reach 1,190-1,260 in 2018 against 1,161 in 2015, with the number of DOS stabilizing at between 460 and 480, compared with 476 units, and franchises settling in a range of 520-550, compared with 543 doors. The number of stores run under license agreements should rise to 210-230 from 142. For DOS, Geox will apply stricter financial criteria with a strong focus on profitability and cash flow, which will result in the closure of the weaker performing stores.

DOS are expected to generate annual comparable store sales growth of 5 percent this year and 6 percent in both 2017 and 2018. Same-store sales at franchised stores are projected to grow by 4 percent in 2016 and by 5 percent in each of the following two years.

The company's gross margin is due to narrow by 0.2-0.3 percentage points this year from last year's level of 51.6 percent because of the expected strengthening of the dollar against the euro, before expanding again from 2017. The group has set the 51.6 percent margin reached last year as the minimum level that it wants to achieve in 2018. The gross operating margin before amortization, or Ebitda margin, is set to rise from 7.1 percent in 2015 to 10-11 percent in 2018, resulting in annual growth of 22 percent.

Geox plans to spend about €17 million a year in 2016-2018 on new store openings and the restyling of existing stores. A similar amount will be spent on new patents and trademarks, the supply chain, information technology, the headquarters, machinery and molds. It will also have to spend an additional €3 million to complete its new Serbian manufacturing plant. It estimates that total capital expenditure will decline to €38 million this year from €38.1 million in 2015, and that they will further fall to €35 million a year in 2017 and 2018.