Q3 2024 XXL ASA Earnings Call Transcript
Key Points
- XXL ASA (LTS:0R3P) has seen a sales recovery quarter by quarter since Q1 2024, indicating a positive trend despite challenging market conditions.
- The company has successfully reduced its inventory size by over 30% compared to 2019, achieving more than 90% healthy inventory, which is a strong indicator of effective inventory management.
- XXL ASA's gross margin has improved by more than 5.2% year-to-date, driven by disciplined pricing and increased private label sales.
- The company has achieved a 34% year-over-year growth in revenue from private label soft goods, contributing to a stronger gross margin.
- XXL ASA has over 4 million members in its loyalty program, XXL Rewards, which is expected to enhance customer loyalty and future sales potential.
- The Nordic sporting goods market has experienced at least 10 consecutive quarters of negative growth, impacting XXL ASA's performance.
- XXL ASA's top line revenue is down approximately 7% compared to the same quarter last year, with significant challenges in Norway and Finland.
- The company's EBITDA has decreased from $35 million last year to $5 million this quarter, primarily due to reduced sales and intense campaigning.
- XXL ASA is facing low availability of top products, with only 78% availability, which is below the desired level of high 90s, affecting sales potential.
- The company is contemplating a holistic financing solution, including a rights issue and bridge loan, to address short-term liquidity needs and working capital investments, indicating financial strain.
Good morning, ladies and gentlemen and welcome to the third quarter results presentation. My name is (inaudible) and I have the pleasure of guiding you through today's presentation, our CEO Freddy Sobin and our CFO Lars Syse Christiansen will take you through the presentation and then followed by a Q&A session.
And for media, there will be an opportunity to perform separate interviews after the presentation.
So please direct your request to the press contacts.
So without further introductions.
Joining us online, welcome to our Q3 presentations where we'll walk you through both the CEO update the financial results with our new CFO as well as concluding with what do you say? Let's get going. Q3 2024. Unfortunately, we need to establish that there is Nordic exporting goods market have now seen at least 10 negative consecutive quarters with negative market growth. So we're acting a tough macro, a tough market and most probably we are also looking at an 11th negative consecutive quarter in the market.
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