Geox registered a 9 percent increase in orders from wholesale clients for its spring/summer collection, but the company's third-quarter sales indicated a slowdown compared with the first half. With a turnover of €282.0 million, sales growth was limited to 2.5 percent in the third quarter, against a 5.5 percent increase in the first half, due to weak sales at the company's own retail stores.

The order backlog grew by a high single-digit rate for footwear and by a low double-digit rate for apparel. Orders from Italy were up by a mid-single-digit percentage. They rose by a high single-digit rate in the rest of Europe and by low teen rates, on average, in the rest of the world. Spring/summer orders benefited from a low single-digit increase in the average price largely due to a more favorable product mix. The company also enjoyed strong order levels from all wholesale channels, led by e-commerce clients, whose orders rose by more than 30 percent.

In the first nine months of the year, Geox' revenues totaled €739.3 million, up by 4.3 percent at actual currency rates and by 4.7 percent at constant rates, underpinned by the wholesale channel. Overall, footwear sales increased by 4.6 percent to €669.0 million and apparel sales went up by 1.6 percent at €70.4 million. On a currency-neutral basis, shoe sales rose by 4.9 percent and apparel by 2.4 percent.

The company's wholesale revenues rose by 11.3 percent to €345.8 million in the nine months, with an increase of about 13 percent in the latest quarter. On a currency-neutral basis, nine-month sales were up by 11.6 percent.

Meanwhile, sales to franchisees dropped by 1.5 percent to €119.7 million, while those of Geox's directly-operated stores (DOS) fell by 1.0 percent to €273.8 million due to weak comparable store sales and the overhaul of the retail network. At constant exchange rates, sales to franchisees fell by 1.3 percent and those of the DOS by 0.4 percent.

The company continued to trim its store network. It had 1,148 mono-brand stores worldwide at the end of September, of which 452 were DOS, compared with 1,161 units at the end of 2015, including 476 DOS. Geox opened 68 new stores and closed 81 during the nine months. The tally included 12 relocations.

Same-store sales were flat in the first nine months of the year compared with a 4.1 percent rise in the same period of 2015 and a 1.8 percent increase in the first half of this year, indicating a negative trend in the third quarter.

Geox pointed out that comparable store sales were weak in France, Belgium, China, Hong Kong and Japan. Excluding those markets, same-store sales were up by 3.1 percent in the first nine months. Same-store sales were flat to slightly negative in Italy and down by 1.5 percent in the rest of Europe, excluding France and Belgium. The growth rate was in the high single digits in North America, while comparable sales were up by 20 percent in the rest of the world.

Sales were affected by a “soft markdown period” in July and August, and warm weather in September in all key markets as well as tough comparative figures. The group stressed that the trend in same-store sales has improved in October, but was still down by a low single-digit rate. In China, comparable store sales turned positive in October and the trend improved in the opening days of November.

Adding the retail network's performance in October and the beginning of November, Geox's same-store sales were still flat for the 44 weeks to Nov. 6, compared with a 5.1 percent increase a year earlier. Thanks to the reorganization of the retail network and an easier comparison against the month of November and December in 2015, which were unseasonably warm months, the management anticipates an improvement in same-store sales in the closing weeks of 2016. For the same reasons, Geox is confident that it will achieve “a much healthier performance” in terms of comparable store sales in 2017.

The group's overall sales in Italy were down by 2.9 percent to €231.2 million in the first nine months, with the country's share of total revenues falling to 31.3 percent from 33.6 percent a year earlier. The decline was prompted by the rationalization of the mono-brand network. Wholesale revenues were up by 3.7 percent in the country.

In the rest of Europe, Geox's turnover rose by 6.3 percent, or by 6.4 percent at constant currency rates, reaching €322.8 million. All markets posted positive performances in the nine-month period, led by a double-digit increase in the U.K. In the third quarter, sales in France and Belgium were flat.

Sales increased by 1.6 percent to €46.8million in North America. At constant foreign exchange rates, the rise amounted to 5.2 percent. In other countries, sales totaled €138.6 million, up by 14.4 percent in euros and by 15.2 percent in local currencies, with Russia, Eastern Europe and the Middle East and Africa up by “strong” double-digit rates.

The company added that overall internet sales through its own platform and third parties grew by over 30 percent in the nine months, and now represent 9 percent of total sales. Europe is the group's largest market for Geox's e-commerce operations.

Geox did not release earnings figures but noted that it is boosting efficiency and reducing costs thanks to the rationalization of the retail network, the renegotiation of store rents, and an overall cut in structural costs as well as marketing initiatives aimed at raising sales conversion rate in the stores. The group stressed that the measures are generating better results than expected and that its operating and net profits will be substantially in line with 2015.

Financial analysts currently forecast Geox's full-year sales at around €924 million, against €874.3 million in 2015, Ebit at around 25.0 million, in line with last year's €24.9 million, and net profit at around €13 million, close to last year's level of €10.0 million.