MILAN — Yoox Group on Monday reported solid growth in the three months ended March 31, lifted by gains in its main markets and the benefits of the dollar’s rise.
In the first quarter of 2015, net income rose 30 percent to 1.2 million euros, or $1.31 million, compared to 900,00 euros, or $1.2 million, in the first three months of 2014.
Consolidated net revenues rose 16.4 percent to 147.2 million euros, or $160.4 million, helped by strong sales performance in its number-one market, North America, where consolidated net revenues surged 43 percent. This was followed by Italy, which rose 10.8 percent and Japan, which ticked up 5.9 percent. Dollar figures were converted from the euro at average exchange rates for the periods to which they refer.
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While Yoox did not release specific sales figures for China or Russia, the company said it recorded “excellent” results in China and Hong Kong, while the Russian market was negatively impacted by the sharp depreciation of the ruble.
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Overall, appreciating currencies such as the Chinese yuan, Japanese yen and the U.S. dollar, in the face of the declining euro, should positively affect the company’s gross margin.
“We expect gross margin for 2015 to be higher than last year’s level. Not only for forex [foreign exchange] but it should be clearly boosted by forex effect,” the company’s chief financial and corporate officer Enrico Cavatorta said during the conference call.
Earnings before interest, taxes, depreciation and amortization were in line with the FIRST quarter of last year, falling slightly by 0.3 percent to 8.1 million euros, or $8.83 million, reflecting higher operating costs.
Yoox said a key indicator — its average monthly unique online visitor rate — increased in the first quarter of 2015 to 18.8 million visits from 14.8 million average monthly unique visits in the same period a year earlier.
The Italian e-tailer also said it sees further global growth in 2015, in light of its merger with Net-a-porter, which is expected to be finalized in September.
The merger, carried out in an all-stock transaction, will give birth to an e-tailer behemoth, which is expected to better compete with mega players like Amazon and Alibaba.
Cavatorta said the company expects extraordinary costs linked to the Net-a-porter merger to total between 12 million and 15 million euros in the full year 2015.
“As anticipated in the merger announcement, Yoox expects extraordinary expenses related to the transaction as well as integration costs,” the company said.
On Monday, it was also revealed that Yoox has inked a six-year partnership with Karl Lagerfeld for the launch of Karl.com in Europe, the U.S. and Japan, which is expected to debut in the fourth quarter.
Yoox also said it signed a letter of intent with Net-a-porter’s parent Compagnie Financière Richemont to finalize a five-year global partnership for the set-up and management of the Chloé and Alfred Dunhill online flagships.
During the conference call, Yoox chief executive officer and founder Federico Marchetti underscored the importance of its contracts with Chloé and Karl Lagerfeld.
“We are very happy to launch an incredible brand like Chloé, which has a very good team and designer,” Marchetti said.
“Karl Lagerfeld is another brand…with the backers they have…and the plans they have for the next six years, which is the length of the contract. We are excited with what we have right now,” Marchetti added.
Yoox already manages online stores for brands such as Valentino and Lanvin. Revenues from its monobrand line of business rose 18.6 percent in the period, while revenues from its primary
source of business — its multibrand business line, which includes Yoox.com, Thecorner.com and Shoescribe.com — rose 15.5 percent.
Yoox shares closed up 0.94 percent at 28.92 euro, or $32.26 at current exchange, on Milan’s stock exchange on Monday.