BERLIN — German luxury label Escada delivered a 5.1 percent profit gain on sales that rose 4.1 percent for the first quarter, and said it faced higher operating costs due to retail expansion and higher marketing expenses.
Escada said first-quarter consolidated profits, after taxes and minority interests, rose to 6.2 million euros, or $7.5 million, from 5.9 million euros, or $7.1 million, in the prior period. Dollar figures are at the average exchange rate.
Consolidated earnings before interest, taxes, depreciation and amortization were flat at 20.5 million euros, or $24.7 million. Group sales for the quarter jumped to 166.7 million euros, or $200.5 million, from 160.1 million euros, or $192.6 million.
While sales and profits improved, the company said results were offset by a slight rise in operating costs in the first quarter. Escada cited the expansion of the BIBA retail chain, increased marketing expenses for the Escada brand and exchange rate differences.
Frank Rheinboldt, Escada’s chief executive officer, said the first quarter met the company’s expectations and constituted a strong base on which the coming year’s objectives could be achieved. But he warned against hasty predictions. “One has to bear in mind that in the usual seasonal course of Escada business, the first three months constitute a strong quarter,” he said. “The results cannot simply be projected over the full fiscal year.”
For fiscal year 2005-2006, Escada expects to see a mid-single-digit sales gain. Sales in the prior fiscal year were 648.6 million euros, or $780.3 million. The label also foresees continued improvement of EBITDA, which reached 65.1 million euros, or $78.29 million, last year.