Oslo, 26 April 2023: XXL delivered a growth of 6.4 per cent in the first quarter 2023 and total operating revenue equaled NOK 2.0 billion (NOK 1.9 billion). The industry continued to experience reduced demand for sporting goods in general and high inventory in the value chain, leading to heavy discount activities. XXL has prioritized clearing out inventory to start coming seasons with more normalized levels and in-season products. The results in the quarter were impacted by clearance campaign activities in all markets, significantly reducing the gross margin. Consequently, EBITDA ended at negative NOK 45 million (NOK 83 million).
In the quarter XXL received the settlement of a private placement of NOK 500 million, which was fully used to pay down debt. Total liquidity reserve ended at NOK 438 million (NOK 820 million) and the net interest-bearing debt amounted to NOK 889 million (NOK 980 million). The inventory situation is improving and is expected to be at a normalized level during Q2 2023.
Highlights:
- Lower demand for sporting goods and high inventory in the industry
- Focus on clearing out inventory – normalization in the upcoming seasons
- Growth of 6 per cent and gaining market shares
- High share of clearance activities impacting the gross margin
- EBITDA of minus NOK 45 million (NOK 83 million)
CFO and Interim CEO Stein Eriksen says:
- “Entering the new year we promised to step on the gas in order to win back market shares in the sports market. We have done that. We report sales growth in a difficult market and have taken market shares in Norway, Sweden and Finland, but it has happened at the expense of weak margins in the quarter.
- We have been successful with our campaigns and especially online sales have got a real boost. Customers have been shopping online to secure the best offers. Our E-commerce operations have seen a growth of 29 percent in the quarter.
- We have also gained control of the inventories. XXL is probably the first sports chain in the Nordics to return to normalized inventory levels. Thus, we will also adjust our campaign activity accordingly”
Outlook
XXL’s target and goal going forward is to over time gain market shares in all markets and continue the growth in the E-commerce channel.
XXL is in the phase of implementing several strategic initiatives and projects to improve profitability and operational efficiency going forward. The longer-term target is “40-30-10” on gross margin, OPEX and EBITDA respectively and when excluding IFRS 16 effects.
In line with the existing strategy, XXL will continue to invest in operational efficiency, selective new store openings, E-commerce platform, existing stores, infrastructure and IT. Total CAPEX for XXL Group in 2023 is expected to be around NOK 150-200 million.
Going forward XXL expects the pace of the store roll-out to be 2-3 new stores per year. XXL has signed 2 new lease agreements for store openings in 2023, whereof 1 in Norway and 1 in Sweden. At the same time XXL will be downsizing several existing stores. The Group will continue to focus on optimizing the store portfolio.
XXL will exit Austria in 2023 and is working on several different solutions, including sale of the Austrian entity. It is already decided to close 3 of the 8 stores as well as the central warehouse facility. XXL has an ambition of having no negative cash effect in 2023 from the Austrian operations and exit.
For further information please find attached the quarterly report and the presentation material.
For APMs please see the quarterly report for further definitions and reconciliations.
The results will be presented at 08:30 CET by CFO and Interim CEO Stein Eriksen. The presentation will be held in English and will be webcasted at www.xxlasa.com.
For further queries, please contact:
Investor Relations:
Tolle O. R. Grøterud
Phone: +47 902 72 959
E-mail: ir@xxlasa.com
Press contact:
Andreas Nyheim
Phone: + 47 952 11 779
Email: presse@xxl.no
This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. This stock exchange announcement was published by Tolle O. R. Grøterud, Investor Relations Officer at XXL ASA, on 26 April 2023 at 07:00 CEST.
About XXL ASA
XXL is a leading sports retailer with stores and e-commerce in Norway, Sweden, Finland, Denmark and Austria. It is the largest among the major sports retailers in the Nordics. XXL pursues a broad customer appeal, offering a one stop shop experience with a wide range of products for sports, hunting, skiing, biking and other outdoor activities. XXL's concept is to have the largest stores with the best prices and the widest assortment of products, focusing on branded goods.