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The huge demand for sports equipment has made XXL a winner of the bag in recent months.
The third quarter result shows an operating profit (ebitda) of NOK 413 million. In the same period last year, XXL received an ebitda of NOK 271 million. It was expected to be NOK 360 million upfront, according to estimates TDN Direkt has obtained from seven analysts.
Growth was also strong in the quarter. Operating income ended at NOK 2.82 billion, an increase of 14 percent from NOK 2.47 billion in the same period last year. XXL writes that sales gradually slowed during the quarter, in part due to a shortage of goods after several months of high growth and demand.
– We had a fantastic quarter in which we doubled EBITDA from operating profit, says XXL manager Pål Wibe, who is also very pleased with the strengthening of gross margin.
In the Norwegian market, the growth was 21 percent, while the total growth in the group was 14 percent. Growth in Norway was driven by the high demand for outdoor living and bicycles.
Profit before tax ended at DKK 188 million in the quarter. This is more than a quadruple from the third quarter of last year, when the profit before tax was NOK 42 million.
650 percent increase
Among companies with a market capitalization of more than NOK 5 billion, XXL has been a clear winner of the stock market for the past six months.
At the lowest point in late March, the stock was trading at NOK 3.42. Then the funding package went live and Pål Wibe stepped in as the new XXL boss.
Since then, it has only gone up. The sports industry is among the industries that had wind in their sails during the crown period, with the stock trading for just under 26 crowns on Monday. This corresponds to a 650 percent increase over the course of seven months.
– This has nothing to do with me. Retail is a team effort, Wibe said when he posted 35 percent growth in the Norwegian market earlier this summer.
Refinancing earlier this year has made the financial situation significantly stronger. XXL writes that it has continued to reduce inventory and that total liquidity reserves are now NOK 1.24 billion, compared to NOK 575 million in the same period last year. At the same time, net interest-bearing debt has fallen from NOK 1.87 billion last year to just under NOK 45 million now.
Wibe has made 50 million.
Among those who have gained the most from the stock market rise are the leaders and board of XXL. DN recently wrote about an equity investment program that has provided an adventurous return for those who participated in it. With the help of a 40 million XXL loan, they were able to maximize their investment and get a return of around 800 percent in five months.
Wibe’s investment of just over six million has a present value of about 55 million.
– It is more fun to work when these programs are implemented. You roll up your sleeves and when you are successful, everyone participates in the awards ceremony. I hope they make a lot of money, the chairman of the board, Hugo Maurstad, told DN.
Invest more in Austria
So far this year, XXL has signed four leases for new stores in 2020. One of them is in Norway, one in Sweden and two in Austria. Three of these have already opened, while the last one is scheduled to open in Austria in the fourth quarter.
The companies hope to open 3 to 5 new stores per year and focus on new stores in Austria and some in Sweden. At the same time, more existing stores will be downsized.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For more terms, see here.
