Following today’s meeting, the Management Board of Wolford AG revised its forecast for the current 2016/17 financial year (May 1, 2016 to April 30, 2017).
In the light of a significant decline in first-quarter revenue (-18%) compared to Q1 2015/16 and the ongoing market weakness in the month of August, it is unlikely that the company will be able to make up for the revenue decrease during the rest of the financial year. Negative events in important core markets (i.a. political uncertainty in the USA, fear of terrorism in France, Brexit) have led to weak consumption and declining customer traffic. In particular, Wolford’s high margin retail business reported a 9% drop in revenue in the first quarter of the 2016/17 financial year in comparison to the prior-year period.
Against this backdrop and additional negative currency effects (British pound), Wolford’s operating results (EBIT) in the first quarter of 2016/17 financial year amounted to minus EUR 8,3 million (previous year: minus EUR 3,0 million) significantly lower than the company originally forecast. This unfavorable earnings development can only be potentially offset to a limited extent in subsequent quarterly periods which traditionally report higher sales.
As a result, the Management Board expects revenue for the entire 2016/17 financial year to stagnate or drop slightly below the prior-year level, and possibly negative operating results in the lower single-digit million euro range. The implementation of the program of measures designed to sustainably increase revenue, enhance profitability and carry out a creative realignment of the company is proceeding on schedule. The cost-cutting drive is being accelerated, which is why the company reaffirms its medium-term planning targets.
Wolford AG will announce details on its business development on September 9, 2016 within the context of the publication of its Report on the First Quarter of 2016/17.