The consolidated net income grew by 35 percent to €41.1 million in the 1st quarter ended March 31, giving Geox a fantastic 22.1 percent net margin. The gross margin remained flat at a high level of 55.0 percent, close to the high scores of Puma. The operating margin increased from 33.0 to 35.4 percent of sales before amortization and depreciation (Ebitda), and from 31.0 to 32.9 percent of sales after these items (Ebit), as the company leveraged out its continuously strong growth.
Consolidated sales rose by 30 percent to €185.8 million in the quarter, with increases of 16 percent in Italy, 46 percent in Germany, 34 percent in the Iberian peninsula, 27 percent in France and 42 percent in the Benelux countries. Italy’s role in the total turnover declined from 51 to 46 percent. Footwear sales increased by 29 percent to €179.8 million, representing 97 percent of total revenues.
The number of Geox shops continued to grow during the 3-month period from 278 to 303 units, of which 172 are located in Italy. Their sales increased by 49 percent during the quarter, accounting for 17 percent of all the footwear sales of the company. In Italy, their sales have grown by 19 percent on a same-store basis in the past 12 months.
Geox directly owns 57 stores around the world and the others are franchises. The company has just opened its third franchised store in the Netherlands, where it has a deal with Nelson Schoen.
With orders up by 30 percent at the end of the period, Geox predicts significant improvements in sales and profitability for the balance of the year. Because of the seasonality of its business, the company’s free cash flow was still negative at the end of the 1st quarter, but it has in better shape. The company’s net financial position was positive at €11.1 million, thanks in part to the proceeds of €39.1 million generated from the recent public offering. One year earlier it was still negative at €75.6 million.