PARIS — SMCP, the parent company of Sandro, Maje and Claudie Pierlot, is anticipating constant-currency sales growth of between 9 percent and 11 percent this year, a slight slowdown compared with growth of 13 percent in 2018.
“The macroeconomic environment is a little uncertain, especially in France, and we are still awaiting clarification with regards to Brexit,” said chief executive officer Daniel Lalonde during a call with analysts after the firm’s 2018 profit announcement Thursday morning.
The firm is continuing to see softer sales in France as a result of the ongoing “yellow vest” protests, which it estimates had a negative impact of 4 million euros on the company’s fourth-quarter revenues in France, he said. But the weight of the domestic business on the firm’s revenues is declining, a trend expected to continue as it further builds its international footprint.
In 2018, France represented 36.9 percent of the group’s revenues, down from 41.3 percent a year earlier.
“Growth of between 9 and 11 percent remains strong,” Lalonde said.
Despite his assurances, SMCP’s share price fell 7.41 percent in trading Thursday, closing at 14.63 euros, as the market reacted to the projection of a slowdown in growth.
SMCP is planning on between 100 and 110 store openings this year, compared with 134 in 2018, as it continues to expand its footprint.
Around 40 percent of these will be in the Greater China region, which continues to perform ahead of expectations this year so far, Lalonde said, despite an extremely strong first half last year.
A further 40 percent of the openings are planned for strategic markets in Europe, he added, with the remainder to be spread mainly across North America and other European markets.
SMCP is anticipating stable EBITDA margin for 2019 — in 2018, this amounted to 16.9 percent, up 0.1 percentage point year-on-year — as it continues to ramp up its investments, notably in digital and in its Asian business, Lalonde explained.
In accessories, one of the company’s key growth areas alongside men’s wear and digital, the firm will begin expanding the presence of its products outside its own store network, beginning with corners offering shoes from all three of the brands that opened last week in three Printemps doors in France.
SMCP, which is controlled by Chinese textile conglomerate Shandong Ruyi Group, reported net income of 50.2 million euros for 2018, compared with 6.3 million euros a year earlier, when its profits were hit with one-off costs related to its initial public offering in 2017.
Earnings before interest, tax, debt and amortization last year reached 171.5 million euros, an 11.6 percent increase year-on-year. Adjusted EBITDA margin gained 0.1 percentage point to 16.9 percent.
“In 2018, SMCP delivered another year of profitable growth, in line with its guidance,” Lalonde said. “Market conditions have been challenging, particularly in quarter four, but SMCP demonstrated, once again, the strengths of its unique business model and delivered best-in-class performance.”
As reported, the company’s full-year sales grew 11.5 percent to 1.02 billion euros, breaking the billion barrier for the first time, driven by growth abroad, especially in the Americas and Asia, and by digital, which represented 14.7 percent of revenues in 2018, up from 3 percent five years ago.