KappAhl's Q4 sees higher sales, but margins suffer due to price cuts

By

Sandra Halliday

Published
Sep 13, 2019

With Swedish fashion retailer KappAhl’s majority shareholder Mellby Gård having made a public takeover bid for the firm, the company has shared an update on its fourth quarter and its shows sales and profits rising, even though the gross margin has fallen. The final date for acceptance of the offer is September 20.

The company said that preliminary net sales for the June to August quarter rose to SEK1.322 billion (€124 million/£110 million) from SEK 1.239 billion. And preliminary operating profit is SEK108 million, up from SEK 66 million a year ago. 

Meanwhile preliminary net sales for the full year rose to SEK4.902 billion from SEK4.76 billion. But operating profit in the period fell to SEK168 million from SEK282 million.

The company said sales in the quarter increased by about 7% compared with the same period of the previous year, “which is a considerable improvement” after the weak third-quarter sales it had reported. 

However, as mentioned, the margin dipped and it seems that the firm’s clearance sales and other promotional campaigns were mainly responsible as it drove sales at the expense of profits. 

That said, its operating profit was positively impacted by its previously announced earnings improvement programme, “which is delivering clear savings in both stores and administrative functions.”

The full figures will be published by the company on October 9.