Globe International, Ltd. reported that fiscal 2024 full-year revenues declined 5 percent year-over-year to A$222.3 million. The company attributed the decrease to the normalization of the hardgoods business.

The company trades and reports in the Australian dollar (A$) currency.

“We believe the normalization in skate hardgoods cycle is essentially complete, and Globe’s initiatives have successfully stabilized our business and cleared excess inventory,” the company noted in its annual report.

The company also noted that total revenue is now over A$60 million higher than the pre-hardgoods cycle, driven by growth in FXD and Salty Crew.

“Skate hardgoods has, and will always, be a cyclical industry, and Globe has implemented strategies to grow, evolve and diversify our business via focus on core apparel brands to complement our skate heritage,” the company wrote in its report.

Globe reported that its fiscal 2024 results were driven by improved performances across all three key regions, which include:

Australasia: The company’s most profitable region, was driven by increasing demand for FXD workwear, streetwear apparel and emerging brands.

  • Total segment revenue was A$115.8 million for the fiscal year, compared to A$112.4 million in fiscal 2023.
  • Australia continues to be the main profit engine, generating healthy margins.
  • Increase in profitability year-over-year driven by strong workwear and streetwear performance.
  • Globe will continue to invest in and grow emerging brands and programs in Australia, including FXD, Its Now Cool and Salty Crew.

Europe: The company completed the restructuring of this division, delivering a modest profit in FY24 after a considerable loss in FY23. There is now a solid base to grow the Group’s core brands in the region, with primary focus on Salty Crew, It’s Now Cool and Globe footwear.

  • Total segment revenue was A$24.0 million for the fiscal year, compared to A$27.9 million in fiscal 2023.
  • Operational overhaul complete, leading to a turnaround from a “significant loss to a modest profit” in FY24.
  • Hardgoods sales stabilized, and the platform is set to grow revenues in FY25 and beyond.
  • Primary revenue growth engines in Europe are expected to be Salty Crew apparel, Globe footwear, Impala, and Its Now Cool.

North America: Experienced a return to profit after a difficult 2023 due to a downturn in the hardgoods cycle and excess inventory. Growth in apparel brands Salty Crew and FXD drove performance.

  • Total segment revenue was A$82.5 million for the fiscal year, compared to A$94.1 million in the prior year.
  • Returned to positive EBIT in FY24 after poor FY23, which was impacted by hardgoods inventory overhang.
  • Segment EBIT amount to A$7.5 million in fiscal 2024 after essentially flat EBIT in fiscal 2023 (A$154k).
  • Globe and Impala stabilized after clearing of inventory in FY23; both returned to positive EBIT contribution.
  • Salty Crew is a premier brand, with FXD making successful inroads into the U.S. market.

The Group’s core brands, Globe, FXD, Impala Skate and Salty Crew, were all said to be profitable, “showcasing market leadership in their respective industries.” The company called out that the emerging brand, ‘It’s Now Cool, ‘ successfully demonstrated strong potential for future growth.

The company generated EBIT of A$17.1 million for the fiscal year, up A$12.4 million versus fiscal 2023, reportedly driven by strong apparel brand performance, enhanced operational efficiencies and effective cost management. EBIT margin reported for the year was 7.7 percent of net sales, compared to 2.0 percent in the prior year. This increase in profitability is attributed to a reduction in hardgoods clearance sales and a lower operational cost base.

According to the annual report, the operational cost base was reset in fiscal 2023 by removing underperforming brands and their associated costs and restructuring Globe’s European division.

“These initiatives, in conjunction with operational efficiencies, helped to improve the quality of earnings in FY24, putting Globe on a strong footing as it enters FY25,“ the company wrote in its annual report.

International markets contributed $8.1 million of EBIT (32 percent of total EBIT) versus an EBIT loss of $5.7 million in fiscal 2023, highlighting international growth opportunities.

NPAT (net profit after tax) amounted to A$11.5 million in fiscal 20924, A$10.0 million versus fiscal 2023, with all core brands (Globe, Salty Crew, Impala and FXD) said to be profitable for the year.

Considering the Group’s significant NPAT performance and strong balance sheet, the Board has declared a “fully franked“ final dividend of A$0.13 cents per ordinary share (cps) to be paid to shareholders on September 20, 2024. This brings the total fiscal 2024 dividend to A$0.22 cps, fully franked, which is a significant increase from fiscal 2023’s total dividend of A$0.07 cps. The Board determined the final dividend based on the Group’s underlying earnings, cash generated from operations and strong balance sheet.

The consolidated entity’s cash position, net of working capital borrowings, was A$22.1 million on June 30, 2024, significantly higher than the A$7.8 million at the end of the prior financial year.

“Our multi-brand strategy continues to deliver profit and positive cashflow with the strategic initiatives implemented in FY23, which included restructuring, inventory optimization and cost structuring, positively impacting the bottom line,“ commented Globe International CEO Matt Hill.

“While it’s premature to provide reliable sales outlooks, we expect FY25 sales to remain relatively flat, but profitability to increase through sustained brand leadership and the strategic initiatives of FY23 continuing to positively flow through,“ Hill said.

“While skate remains our heritage and culture, we continue to evolve our brand mix by creating iconic brands that operate in the board sports, streetwear, workwear and outdoor distribution segments around the world. I am proud of the significant progress the Group made over FY24 that led to increased profitability and a return to significant dividend payout for our shareholders. Looking to FY25, we will continue to focus on growing our market-leading brands, investing in core and emerging brands, and driving profitability to deliver value for our shareholders,” he concluded.

Image courtesy Globe International, Ltd., FXD