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Odd Molly International AB (publ)
Stockholm, Sweden, October 21, 2014
Further steps in the right direction - increased sales and improved profitability
January 1 - September 30, 2014
· Net sales amounted to SEK 222.4 million (180.8).
· The gross profit margin was 54.2 percent (55.0).
· Operating profit amounted to SEK 5.5 million (-10.0).
· Net profit amounted to SEK 3.6 million (-8.0).
· Earnings per share amounted to SEK 0.62 (-1.39).
July 1 - September 30. 2014
· Net sales amounted to SEK 88.4 million (70.1).
· The gross profit margin was 52.7 percent (54.5).
· Operating profit amounted to SEK 8.7 million (1.5).
· Net profit amounted to SEK 6.8 million (1.6).
· Earnings per share amounted to SEK 1.18 (0.27).
Events during and after the quarter
During the quarter externally operated shop-in-shops were opened in three locations in Sweden: Malmö, Göteborg and Uppsala. A decision was made to close a shop-in-shop in Copenhagen.
Orders taken during the quarter for the first two seasons of 2015 resulted in a total order value for the wholesale operations of SEK 110 million (100).
After the end of the quarter a contract was signed on a Group-operated Odd Molly store in Nova Lund, with a scheduling opening before the end of the year.
Comment from the CEO
Odd Molly’s development continued in a positive direction during the third quarter. We increased sales and improved profitability. We are happy about this, though we always want to perform even better. We have just completed taking orders for parts of the spring 2015 collection, which we are very pleased with. The collection has been expanded to include swimwear and bedding that fits our design concept. As a whole, the collection is comprised of a well-balanced mix of products that our customers want. We are very pleased with the sell-through rates we are seeing in stores right now, and we are also happy about the positive response we getting from retailers.
An important part of our growth strategy is to increase the share of sales through channels designed strictly for Odd Molly’s concept - whether in stores we operate ourselves or in those managed outside the Group. During the quarter we opened three shop-in-shops in strategic locations in Sweden and signed an agreement on our own store in Lund, scheduled to open later this winter. The choice of how we operate depends on conditions on the ground in the specific location or marketplace. This flexibility offers many advantages. Our own stores continue to develop well, led by the web shop, which is making steady progress.
During the year we have started working based on four seasons instead of two as we did before, and we are seeing clear benefits. It leads to lower risk, closer customer contacts and a more consistent flow of sales and work over the course of the year. We expect that inventories will be easier to control and, as a result, that our gross margin will be more stable.
Another important aspect of our strategy is the decision to take control over sales to retailers in our largest markets. I am very proud of our organization and the sales team that is out there meeting, listening to and being inspired by our customers - and vice versa. This is what a strong customer focus looks like in practice.
Odd Molly’s collection designs also continue to produce positive results in the form of higher average orders, lower average prices and more favorite items that are selling more. Right now work is under way to shape the collections for next fall at the same time that we are shipping out merchandise to stores. Our focus is to continue to develop a strong lifestyle concept and drive our business with profitable growth.
Anna Attemark, CEO
Please see the full report in the attached PDF file.