Peak Performance improved its operating margin by three percentage points to 20.8 percent during the first quarter ended Sept. 30, as compared to the same period a year ago, according to its parent company IC Group, thanks mainly to higher average selling prices and higher gross margins.
The brand's sales were flat in terms of local currencies during the period. In reported terms, they declined by 0.6 percent to 346 million Danish kroner (€46.5m-$54.7m), but they would have risen by 4.2 percent excluding the effect of a change in the timing of shipments, which should positively affect the current quarter.
Sales went up by 4.7 percent at the brand's retail operations, with a positive development on a same-store basis and through e-commerce. That includes the sales of two Swedish franchised shops that have been converted to directly operated stores.
In a conference call with analysts, IC Group's management declined to discuss its plans to divest all or part of Peak Performance or the timing of the strategic review process.
The results of Peak Performance contributed to raising the group's Ebit margin by 1.4 percentage points to 17.3 percent in the quarter. Another brand of the group, By Malene Birger, improved its margin as well in spite of lower revenues, but Tiger of Sweden and other brands saw their sales as well their profitability decline.
Overall, IC Group booked a drop of 4.8 percent in revenues to DKK 810 million (€108.9m-$128.2m) for the quarter, due in particular to lower wholesale revenues for Tiger of Sweden. Improved product margins and a larger share of direct-to-consumer sales led to an increase of 2.1 percentage points in the gross margin to 58.3 percent.
Maintaining its financial outlook for the full financial year, the management expects to reach an Ebit margin of around 5 percent for the group on a slightly reduced turnover.