Jan 20, 2017
Oroton warns sluggish Christmas will impact earnings
Jan 20, 2017
Australia's Oroton Group said on Friday it expects to report significantly lower first-half earnings on March 28, on the back of a sluggish Christmas season trade.
The luxury leathergoods and accessories brand recorded a 10% decline in year-to-date sales, with just two weeks left in the first half of Oroton's financial year. The company said like-for-like sales plummeted 10%, a stark contrast to the 10% uptick over the same period a year earlier.
Oroton said it now expects earnings before interest, taxes, depreciation and amortisation (EBITDA) of between $4.5 million and $5 million in the six months to January 28, compared to $8.9 million for the prior period.
Oroton Group, which also retails Gap and Brooks Brothers in Australia, said weak like-for-like sales did not improve during Boxing Day and the New Year. It also cited a $1 million hit from exchange rate movements.
However, CEO Mark Newman said the group's strategy to maintain its premium positioning for the Oroton brand was making good progress with like-for-like store sales, excluding discontinued categories, performing strongly.
The group's Gap stores were also hit by lower sales due to a colder than expected spring season, which he said led to "aggressive discounting."
Here, same store sales slipped 11 per cent, compared to a six per cent increase in the same period a year ago.
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