Head N.V. Expects 10 Percent Decline in Winter Sports in 2012

Head NV said sales declined 2.8 percent to €97.0 million ($121 mm) in the third quarter ended Sept. 30 as its Winter Sports and Sportswear dealers cut back their pre-season orders for the upcoming winter.

After tracking ahead of last year for the first six months of the year, Winter Sports sales fell 11.8 percent to €52.5 million ($66 mm) in the third quarter as Head began to deliver for the 2012/13 season. Head said some International retail chains cut pre-season orders by 20 percent to 25 percent across Europe through the first nine months of the year, driving down Winter Sports sales for the period by 7.9 percent.
 

“We have now collected our pre-season orders and whilst our declines are not as dramatic, we still anticipate around a 10 percent deterioration in sales for 2012 compared to the prior year, with skis and snowboards having suffered more than boots,” the company said in its interim statement.

Racquet Sports sales increased by 12.8 percent to €34.3 million c($43 mm) compared to the year earlier period, driving by higher volumes and improved product mix of both racquets and balls in North America and compounded by favorable exchange rates. Diving sales for the three months grew 0.6 percent to €11.1 million ($14 mm). Diving sales are up 4.9 percent for the nine months ended Sept. 30 due to market growth in North America and Asia offset by softer sales in Europe. The company believes it continues to outperform the market in Europe and take market share. Sportswear sales declined 30.6 percent to €985,000 in the quarter as winter outerwear sales fell off, but are still running 14.9 percent ahead of last year for the nine months ended Sept. 30.

Adjust operating profit for the quarter declined 17.5 percent to €7.89 million ($10 mm), while net income increased nearly eight fold to €4.99 million ($6 mm) compared with the third quarter of 2011.

For the nine month period ended Sept. 30, the company reported a net loss of €5.1 million ($6.5 mm) compared to a net loss of €12.4 million ($17.4 mm) in the comparable 2011 period.