Geox SpA reported lower sales and profits in the first quarter and predicted sales to slide in the year due to weakness in Europe. Profit in the quarter slipped 4.3 percent to €43.4 million ($56.3 mm). Revenues gave back 4.5 percent to €330 million ($428.0 mm) and were down 5 percent on a currency-neutral basis.
By region, sales in Italy, Geox's home market, were down 4.2 percent to €131.6 million ($170.7 mm). Sales in Europe declined 6.3 percent to €138.7 million ($179.9 mm). North American sales were down 12 percent at €13.5 million ($17.5 mm) and 15 percent at constant-exchange rates. Sales to Other Countries increased 3 percent to €46.2 million ($59.9 mm).
Looking ahead, Geox expects revenues in the first half to decline versus the prior year due to challenging economies in Europe, especially in the Mediterranean area, with the introduction of austerity policies, credit restrictions and lower consumer expectations.
“Considering the general expectation that these problems will continue in the second half of the year and the fact that, in certain geographical areas, the distribution network is holding stocks of products from the previous Fall/Winter collection, which is resulting in a weak trend in orders for the 2012 Fall/Winter season, management is convinced that it has to look with considerable caution and prudence also at the sales forecast for the entire year, which is likely to see an overall decrease slightly higher to the percentage expected for the first half,” Geox said in a statement.
