Norwegian sports retailer XXL warned it expects to report a loss in the second quarter due to “weak consumer sentiment and reduced demand for sporting goods in general.”
Total revenue for the quarter is expected to decline 9.5 percent to around NOK 1.9 billion ($179 mm), down from NOK 2.1 billion a year ago.
XXL said, “The market is characterized by high inventory levels in the whole value chain, resulting in aggressive pricing and excessive campaigns. Higher campaign and clearance activities for XXL will impact the gross margin,” which is expected to range between 30 percent and 32 percent, down from 37.9 percent in the year-ago quarter. EBITDA is estimated to be in the range of negative NOK 25 to 75 million, compared with positive NOK 205 million a year ago. XXL added, “This could change as the last weeks of June are important sales weeks.”
XXL said it was granted a temporary deferral of tax payments in Sweden, boosting its cash position by NOK 345 million, although the full amount must paid in monthly installments in 2024.
The company said, “XXL expects to be in compliance with its June 30, 2023, financial covenants and is in constructive dialogues with its lending banks.”
