German fashion and lifestyle company Tom Tailor Holding AG (TTI.DE, TTI.BE, TTI.MU) Tuesday reported a sharp decline in annual profit, weighed down by one-off costs related to an acquisition. Adjusted earnings saw growth and revenue climbed 53 percent from last year.
Net result for 2012 plunged 69.3 percent to 3.1 million euros ($4 million) from 10.1 million euros in 2011.
The company incurred one-off transaction costs of 19.5 million euros related to the takeover of Bonita, as well as higher marketing expenses for the Tom Tailor advertisement and the launch of the Tom Tailor Polo Team brand. The reorganisation of sourcing structures in Asia also impacted profitability.
Excluding items, recurring net result improved 26 percent to 18.9 million euros.
Adjusted earnings before interest, tax, depreciation and amortisation or EBITDA increased 38.3 percent to 66.5 million euros.
Gross profit jumped 65.3 percent to 333.2 million euros. Gross profit margin was 52.9 percent compared to 49.0 percent in 2011.
Sales for the year climbed to 629.7 million euros from 411.6 million euros in the prior year. On a like-for-like basis, sales increase was 4.6 percent.
Tom Tailor Retail sales climbed 33.1 percent to 205.8 million euros with like-for-like growth of around 15 percent, while Wholesale sales advanced 5.1 percent to 270.0 million euros. Acquired business Bonita generated 153.9 million euros in 2012.
In Germany, sales increased to 419.2 million euros from 267.0 million euros. Foreign sales climbed 45.6 percent to 210.5 million euros.
Commenting on the results, Dieter Holzer, CEO, said, ''...we were able to once again move against the negative market trend. Growth was particularly driven by our TOM TAILOR retail segment and our online business, where we boosted sales by more than 40%.''
Looking ahead, the company aims to achieve sales of at least 900 million euros and a recurring EBITDA margin of at least 12 percent in 2013.
The company plans to open 60 Tom Tailor stores and around 40 Bonita and Bonita men stores.
The group is aiming for an EBITDA margin of 15 percent by 2017 at the latest.
The stock closed at 16.43 euros on Monday.
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