BERLIN — First-quarter net profits at Douglas Group AG dropped 2.3 percent to 91.7 million euros, or $123.7 million.
Earnings before taxes for the Hagen, Germany-based company, whose retail activities include Douglas Perfumeries, plus books, jewelry, fashion and confectionery businesses, fell 1.1 percent to 140.6 million euros, or $189.7 million, in the three months ended Dec. 31.
Douglas stock closed up 1.28 percent at 33.90 euros, or $44.59 Wednesday on Xetra, the electronic trading platform of the Deutsche Boerse Group.
Dollar figures are converted at the average exchange rate for the period to which they refer.
Company sales rose 1.3 percent to 1.19 billion euros, or $1.61 billion. Adjusted for last fiscal year’s closing of 32 perfumeries in Russia, the increase was 2.8 percent. Like-for-like revenues gained 2.1 percent.
Douglas Group’s online shops registered a 21 percent sales gain to more than 80 million euros, or $107.9 million, accounting for 7 percent of total company revenues.
Net sales for the firm’s 1,184 perfumeries dipped 0.3 percent to 657.6 million euros, or $887.1 million. Douglas’ 447 German doors posted sales growth of 4.9 percent to 357.9 million euros, or $482.8 million. On a like-for-like basis, revenues increased 4.4 percent.
Douglas’ 737 international perfumeries reported sales of 299.7 million euros, or $404.3 million, a 5.9 percent decline. On a like-for-like basis, revenues decreased 0.5 percent. Nineteen perfumeries were opened in the first quarter, of which 17 were abroad, with emphasis on Poland, France and Romania.
Douglas said it would channel about 75 million euros, or $98.7 million at current exchange, into its perfumeries in this fiscal year. The company is to open about 40 new stores, modernize existing locations and strengthen online activities. Douglas began rolling out a signature cosmetics line in December and said the share of exclusive and own-brand merchandise carried in its perfumeries would rise from the current level of 14 percent to around 20 percent over the next two or three years.
Douglas Group’s Thalia book arm increased first-quarter revenues by 1 percent to 321 million, or $433 million, but it continues to suffer as business in the sector continues to move toward e-books and Internet retail. To counter this, the company plans to close stores, sublet space and expand Thalia’s non-book offerings.
Douglas Group president and chief executive officer Henning Kreke acknowledged the difficulties, but stated, “Despite persistently large structural challenges for the entire book sector, the executive board expects for the current fiscal year a modest increase in sales for the Douglas Group to more than 3.4 billion euros and an EBITDA of 200 to 250 million euros,” or $4.47 billion and between $263 million and $328.9 million, respectively, at current exchange.
Douglas’ final first-quarter figures, which were on average slightly lower than last month’s preliminary report suggested, were released today amid speculation about the company’s future and possible privatization. In January, Henning Kreke, whose family owns 12.6 percent of Douglas Group, initiated talks with financial investors.
Last Friday, regulatory filings showed that shareholder Erwin Müller, owner of Germany’s fourth-largest drugstore chain and 10.8 percent of Douglas, has acquired options on about 15 percent of additional shares, which would give him one of the largest stakes in the company.