May 16, 2010
Geox sees sales down 5-10 percent in 2010
May 16, 2010
By Antonella Ciancio
MILAN, May 14 (Reuters) - Italian shoemaker Geox (GEO.MI) forecast on Friday 14 May a mid to high single digit percentage fall in 2010 sales, hit by lower spending in cash-strapped Europe, after posting quarterly results which missed forecasts.
However, the maker of "no sweat" shoes said it saw some encouraging signs after orders for its autumn/winter collection edged up and the drop in revenues slowed to 11 percent in April from a 13 percent drop in the first quarter.
About 70 percent of Geox's turnover comes from markets like Europe which are in difficulty because of the economic crisis.
First-quarter revenues fell to 331.1 million euros ($421 million), missing expectations of 342 million euros forecast by 10 analysts polled by Thomson Reuters I/B/E/S.
"As expected, the quarter was challenging because of the ongoing international crisis," Chairman Mario Moretti Polegato said. "However I am not worried about prospects for the group, given the encouraging signs we are seeing at our flagships".
Sales in 2010 are expected to fall, although less than in the first quarter, Geox's corporate managing director Massimo Stefanello told Reuters on Friday 14 May.
In an interview after the results, Stefanello said the drop in sales this year would be mid to high single digit.
Shares in Geox fell to close 10.7 percent down at 4.405 euros, its lowest level in more than three months, underperforming the broader Milan index .FTITLMS.
First-quarter sales were down 9 percent in Italy, the group's leading market, and off 17.6 percent in Europe. In the rest of the world they were 8.9 percent lower.
"We know that those companies that have a bigger presence in the U.S. or Asia are going better," Stefanello said.
Footwear sales, which represent 88 percent of turnover, fell 16 percent in the quarter, while clothing sales grew 9 percent.
Geox, which has more than 1,000 stores worldwide, plans to open 85 stores in 2010 and close other 35, Stefanello said.
He said Geox's spring-summer collection sales at its own stores dropped 2 percent in the March-May 9 period. (Editing by Mark Potter and David Jones) ($1=.7872 Euro)
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