MILAN — A balanced organic performance across all key markets helped the Yoox Net-a-porter Group SpA see revenues in the first quarter climb 13.8 percent to 446.2 million euros, or $490 million, compared with pro-forma sales of 392 million euros, or $439 million, in the same period last year. The official merger of Yoox and Net-a-porter groups took place in October 2015 and pro-forma numbers are based on historical data from both companies.
The figures were released on Thursday at the end of trading in Milan, where the company is publicly listed. In accordance with a new European directive, public companies are no longer obliged to report first- and third-quarter financial figures. Starting with the first quarter of the year, YNAP has decided to voluntarily provide information on sales trends.
During a call with analysts, Enrico Cavatorta, chief financial and corporate officer, revealed that YNAP has signed a new five-year global agreement for the set-up and management of the Isabel Marant online store, which will be launched in 2017. Also, he said the group has renewed the agreement to operate the armani.com store for an additional 10 years, until Dec. 31, 2025. As part of the renewal, the collaboration will be extended to A|X Armani Exchange, which is distributed primarily in the U.S. and Canada. The A|X Armani Exchange brand will be added to armani.com in North America at the beginning of the third quarter of 2016. Also, YNAP has renewed its global partnership with Valentino SpA for the management of the Valentino and Red Valentino online flagships for an additional five years until the end of February 2021.
Silvia Scagnelli, corporate development and investor relations director, said the Marant brand is “Internet-friendly and the online potential is very big.” She also noted that The Outnet private label Iris & Ink will be available on Yoox in September.
Cavatorta highlighted the group’s new partnerships with Tiffany & Co., unveiled in April, and with Prada and Ermenegildo Zegna, which will debut soon, and capsule collections for Net-a-porter including one for Gucci, available from Thursday.
The executive told analysts that he had seen “an acceleration” in the first six weeks of the second quarter compared with the first, envisioning at constant exchange rate “a mid-to-high-teens growth in line with expectations,” expressing “full confidence with the guidance of high-teen sales growth.” He confirmed an estimated improvement of earnings before interest, taxes, depreciation and amortization margin for the year. Cavatorta also confirmed a capital expenditures target of 150 million euros, or $165 million, for the year.
In the three months ended March 31, YNAP recorded a monthly average of 29.6 million unique visitors, which translated into two million orders, up 16.7 percent compared with the same period last year, with an average order value, excluding VAT, of 324 euros, or $356.4. As of March 31, active customers totaled 2.5 million, compared with 2.2 million at the end of March last year.
In the quarter, the multibrand in-season business line, which includes Net-a-porter, Mr Porter, Thecorner and Shoescribe recorded sales of 237.6 million euros, or $261.3 million, up 11 percent, and accounting for 53.3 percent of the total sales. Thecorner and Shoescribe will be discontinued at the end of the spring season, which resulted in a slowdown in growth and a reduction in marketing investments.
The multibrand off-season business line, which includes Yoox and The Outnet, registered sales of 162.1 million euros, or $178.3 million, up 20.1 percent and representing 36.3 percent of the total. Burberry Children debuted on Yoox, and Etro and Fendi on The Outnet.
The monobrand channel posted an 8.2 percent increase to 46.4 million euros, or $51 million, accounting for 10.4 percent of total sales with 40 online flagship stores.
In Italy, revenues were up 15.6 percent to 28.3 million euros, or $31.1 million.
Sales in the U.K. grew 12.6 percent to 65 million euros, or $71.5 million.
Europe, excluding Italy and the U.K., posted growth of 10.9 percent, showing “excellent results” in Germany and Russia, “which registered sound growth at both current and constant exchange rates despite the still negative impact of the euro and ruble exchange rate,” said the company.
Sales in North America rose 16.7 percent to 133 million euros, or $146.3 million. “Current trading in the U.S. is improving to date compared with the mid-teen in the first quarter,” Cavatorta said. “There is an acceleration in April and May also in the U.S.”
Asia-Pacific was up 15.9 percent and Cavatorta remarked on a 25 percent gain in China.
The Rest of the World region showed a 9.7 percent increase.
Scagnelli confirmed the synergy target for 2016, with around 15 to 20 percent of the total run-rate synergies — around 75 million euros, or $82.5 million, in gross EBITDA by 2018. “The integration activities that began in the fourth quarter of 2015 following merger effectiveness are progressing in line with expectations. The company also confirms that it expects to achieve profit and loss positive net synergies this year onward,” she said. Scagnelli said the majority of 2016 synergies are already secured and ticked off several in retail; operations, with lower freight costs and lower credit card and packaging costs, for example; brand relations; corporate, such as the consolidation of the New York office and a reduced hiring rate for overlapping functions, and in marketing.
Responding to one question about Farfetch, following the acquisition by Eurazeo of a minority stake in the online fashion and beauty retail platform earlier this month, Scagnelli said the financial world “is more familiar with the name, but nothing has changed if not the awareness.”