Mar 9, 2016
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Yoox Net-A-Porter sees slightly slower sales growth after strong 2015

Mar 9, 2016

Italian online fashion retailer Yoox Net-A-Porter (YNAP) forecast slightly slower revenue growth this year after strong sales helped it post a 26 percent rise in pro-forma core profit last year.

Italy's Yoox merged at the start of October with upmarket rival Net-a-Porter in an all-share deal that created a leader in the fast-growing online luxury market, handing a 50 percent stake to Swiss luxury group Richemont.

YNAP beat expectations last month reporting a 31 percent increase in 2015 pro-forma revenues to 1.7 billion euros as consumers across regions shopped more on mobile devices.

Stripping out the boost from currencies, pro-forma sales were up 21 percent.

The company said sales this year would rise in the high teens at constant currencies. The boost from exchange rates would also be lower.

"The tailwind (from forex) we had in 2015 is no longer there, at least for this first quarter," Chief Financial and Corporate Officer Enrico Cavatorta told an analyst call.

YNAP plans to invest 150 million euros this year mainly in technology as it works with IBM to build a single platform to support all of the group's online stores.

YNAP owns six multi-brand shopping websites: four of them, including Net-A-Porter.com, sell the most recent fashion collections while Yoox.com and The Outnet.com offer past seasons' items at discounted prices. It also operates online stores for luxury brands including Armani and Valentino.

Two of the four in-season websites will be closed down this year to avoid customer overlaps. Contracts with six brands including Roberto Cavalli and Brunello Cucinelli, which contributed only marginally to 2015 sales, will not be renewed.

YNAP's adjusted earnings before interest, tax, depreciation and amortisation totalled 133.1 million euros last year, broadly in line with an average estimate of 132.6 million euros in a Reuters poll of analysts.

The figures are adjusted to exclude costs related to stock option plans.

Adjusted net income came in at 60 million euros, rising 38 percent and topping a market forecast of 46 million euros.

The EBITDA margin declined slightly to 8 percent of net revenue from 8.3 percent in 2014 due to higher logistics and marketing costs. YNAP said the EBITDA margin would improve this year returning at least to the level of 2014.

Cavatorta said the gross margin would remain broadly unchanged this year as the closure of the two websites would dilute profitability.

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