Free Subscription

  • Access 15 free news articles each month

Professional

Try one month for $7
  • Unlimited access to news,insights and opinions
  • Quarterly and weekly magazines
  • Independent research reports and forecasts
  • Quarterly webinars with industry experts
  • Q&A with retail leaders
  • Career advice
  • 10% discount on events
×

Tough outlook weighs on RCG’s bumper result

athletesfootRCG Corporation has recorded a 34 per cent rise in profit for the half to $23.3 million, but the result has been tempered by the company reducing its full-year guidance citing challenging trading conditions.

The owner and operator of brands including The Athlete’s Foot, Hype DC, Platypus Shoes and Timberland also saw EBITD rose 42 per cent to $42.9 million, with underlying diluted earnings per share up 17 per cent to 4.3 cents.

However despite the rises in revenue and profit, the footwear retail specialist has reduced its full-year EBITDA guidance from $90m to be $85 to $88m, citing “challenging trading conditions since Boxing Day”.

Co-CEO of RCG, Hilton Brett, co-CEO of RCG said the acquisitions of Accent Group and Hype DC over the last two years had given the group a “dominant market position and diversified portfolio”.

“The group is well positioned to withstand tough market conditions, capitalise on opportunities and deliver outstanding long-term returns for our shareholders,” he said.

Accent saw a 32 per cent increase in EBITDA to $29.5 million for the half-year, with wholesale sales of $38.3 million and retail sales of $153.3 million, representing a 28 per cent increase on the prior year.

Like-for-like retail sales were up 7.6 per cent on the prior year, coming off the back of double digit like-for-like growth in each of the previous four financial years.

“All of the Accent retail brands are ideally placed to capture the strong ongoing growth in the athleisure category globally,” said Daniel Agostinelli, co-CEO of RCG and Accent CEO.

“The Platypus offer continues to resonate with our core consumers,” he said. “Our people, the culture in our stores, and the continued innovation and evolution of the instore environment and product offer continue to be key growth drivers.

“The Sketchers brand continues to perform exceptionally well, both for Accent and on a global basis. Skechers USA Inc has just reported another record quarter and record year, with annual net global sales growing 13 per cent to US$3.6 billion.

“This, combined with the strong product pipeline, speed to market and a product offering that resonates across a broad range of categories, provides us with the confidence to continue to drive the growth of the Skechers business,” he added.

Accent rolled out 28 new stores during the half-year taking the total number of stores to 168 with a further 12 stores forecast to be opened before the end of the financial year.

The Athlete’s Foot (TAF) TAF recorded sales of $96.2 million for the half-year, which was down 2 per cent on the previous year” as a result of Boxing Day falling outside the December trading period this year”. Like-for-like sales were in line with those of the prior year. EBITDA fell 15 per cent to $4.8 million, which Brett said was both as a consequence timing of Boxing Day and the temporary closure of several stores that were refitted in the new performance format.

“We are pleased with the growth being achieved in the performance categories, particularly running, and strong back-to-school sales. This growth has been offset by a decline in the lifestyle category. This is both a function of the repositioning of the business and a lack of product innovation in the lifestyle category.”

TAF converted seven stores to a new look performance format, which Brett said RCG is “using the trading results from these stores to gain further insights and refine the offer”.

Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.

You have 7 free articles.