By Patrycja Zaras
GDANSK (Reuters) – Polish footwear and apparel retailer CCC’s shares fell in morning trading on Tuesday following remarks by its chief executive that the start of the year would continue to be weak after a challenging 2022.
“A very demanding year is behind us, and we expect the beginning of this year might be similar too,” Group CEO Marcin Czyczerski said in a statement.
The footwear retailer reported a 12% drop year-on-year in earnings before interest, tax, depreciation and amortisation (EBITDA) late on Monday.
Adjusted EBITDA was flat, while revenue grew 19% to 2.43 billion zlotys ($550.02 million).
As a result of cost cuts implemented in the third quarter amid a “turbulent business environment”, CCC’s cost-to-revenue ratio improved by 4.5% in the fourth-quarter from a year ago.
Shares fell as much as 5.2% in early trading on Tuesday before erasing some losses to trade down 1.5% at 38.700 zlotys.
The group’s newest brand, HalfPrice, fared better, reporting that revenue more than doubled to 285 million zlotys ($64.51 million) on the year, and like-for-like sales stood at 30% year-on-year, mainly due to 40% traffic growth.
Like-for-like sales refers to the growth in sales recorded by the same number of stores a year ago, adjusted for new store openings or closures.
“We see that our idea for off-price works well and in 2023 we want to gradually expand the sales network”, said HalfPrice CEO Adam Holewa, referring to the company’s discounted products.
Multibrand e-commerce remained under pressure, CCC said, citing an outlook for weak global economic growth and demand, as its Modivo brand – which sells clothes, footwear, home and beauty products – sought ways to optimise costs in areas such as logistics, returns and investments in performance marketing.
($1 = 4.4180 zlotys)
(Reporting by Patrycja Zaras; Editing by Bernadette Baum)
