The Lafuma Group managed to improve both sales and margins during the first six months of the year, despite challenging economic conditions and sluggish consumption. The French company's revenues gained 6.9 percent over the year-ago period to €85.6 million, with significant disparities among its brands.
Overall, the group managed to increase the operating margin by 0.7 percentage points to 1.1 percent. It also secured a net profit of €42,000 as compared to a loss of €340,000 in the first six months of 2015.
Millet, Lafuma furniture and the Lafuma outdoor brand grew by 10.0 percent, 8.8 percent and 20.6 percent respectively, while Eider dipped by 3.2 percent and Oxbow dropped by 5.5 percent. However, Oxbow, a surf brand that makes 90.0 percent of its turnover in France, raised its operating margin by 5.3 percentage points to 20.7 percent, thanks to adequate cost control.
Lafuma said that the group had to face many challenges during the first six months of the year, such as weather conditions that were not conducive to mountain activities. In addition, the recent terrorist attacks in France reduced traffic in stores, while the ongoing uncertainty related to the country's economy and the next presidential election hampered consumer confidence.
The wholesale business accounted for 78.0 percent of all sales, compared with 80.0 percent during the first half of 2015, while the retail business - which includes all the stores and e-commerce - represented 22.0 percent of sales.
The Mountain segment, which includes Millet, Lafuma and Eider, grew by 11.0 percent, or by €4.1 million, with growth in the Millet and Lafuma brands offsetting a weak performance from the group's ski brand, EIder, which usually achieves most of its sales during the second half of the year.
The segment, which tends to contribute two-thirds of the company's total sales, became last January a self-standing unit, called Millet Mountain Group, with a differentiated profile for each brand: high mountaineering for Millet, alpine trekking for Lafuma and ski and active mountain sports for Eider. Lafuma's parent company, Calida, said the Millet Mountain Group raised its operating profit by 43.5 percent to €4.5 million during the six-month period.
The Furniture segment, which covers the Lafuma brand of camping and garden furniture, benefited from consumers' regular spending habits, with most garden furniture sales usually happening during the first half of the year. The segment grew by 8.0 percent, or by €2.5 million, with Lafuma attributing this performance to its clear international development strategy.
Lafuma said that the trading environment is still hampered by sluggish consumption, especially in Europe. With no improvement in sight for the second half of 2016, the company expects a decline in activity for the mountain division, due to the high inventories carried by retailers after a poor winter season. However, it remains confident that results for the full year will be similar to last year's.
The good development of the Millet Mountain Group helped Calida to book a 42.2 percent increase in its net profit to 4.9 million Swiss francs (€4.48m-$5.01m) in the first half on 6.4 percent higher consolidated revenues of CHF 178.9 million (€163.6m-$182.9m).