Peak Performance performed a little better than before in the first quarter of its financial year ended Sept. 30, but not at retail, according to its parent company, which has changed its name from IC Companys to IC Group. The brand's total sales were up by 3 percent to 353.0 Danish kroner (€47.1m-$59.0m) in the period, as compared to the same quarter of the previous year, with 5 percent growth in local currencies.
The gross margin declined due to the idle capacity left by the divestiture of IC Group's Mid-Market division as well as larger discounts caused by the summer sales taking place several weeks later than usual.
However, the operating margin before amortization (Ebitda) improved for the Swedish technical and lifestyle apparel brand, rising to 22.8 percent of sales from 22.0 percent. After amortization and depreciation (Ebit), it grew to 21.1 percent from 20.1 percent.
Wholesale and franchise revenues increased by 9.8 percent to DKK 292.4 million (€34.6m-$43.3m) for Peak Performance, but its retail revenues declined to DKK 60.6 million (€7.2m-$8.9m), due in particular to some store closures. Same-store sales actually increased by 3.5 percent. Lower sales at physical stores were more than offset by higher e-commerce revenues.
The parent company, IC Group, reported an overall one percent increase in the total turnover of its continuing operations to DKK 828 million (€97.9m-$122.7m) for the quarter, up by 3 percent in constant currencies. The management blamed unfavorable market conditions in the Nordic countries and other parts of the world, combined with warm weather, for the slow progress.
The group's gross margin declined to 55.2 percent from 55.9 percent a year ago. Operating income (Ebit) improved by DKK 3 million to DKK 141 million (€16.6m-$20.8m), corresponding to a profit margin of 17.1 percent, up from 16.9 percent.
For the full financial year, the management predicts better operating results only for its Premium brands – Peak Performance, Tiger of Sweden and By Marlene Birger – whose combined sales grew by 7 percent in local currencies during the latest quarter, led by Tiger of Sweden.