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Introduction & Market Context
French fashion group SMCP (EPA:SMCP), owner of brands Sandro, Maje, Claudie Pierlot, and Fursac, presented its H1 2025 results on July 29, showing significant improvement in profitability despite ongoing challenges in the Asian market. The company’s stock closed at €4.58, down 1.31% on the day of the presentation, though the share price has more than doubled from its 52-week low of €1.72.
The results demonstrate that SMCP’s strategic initiatives focused on full-price selling, network optimization, and cost discipline are yielding tangible financial benefits, with adjusted EBIT margin more than doubling compared to the same period last year.
Financial Performance Highlights
SMCP reported sales of €601 million for H1 2025, representing organic growth of 3.0% and like-for-like growth of 2.8% compared to H1 2024. More impressively, the company’s adjusted EBIT reached €42.6 million, or 7.1% of sales, a substantial improvement of 3.9 percentage points versus the same period last year.
As shown in the following key financial highlights:
The company achieved a positive net income of €11 million, a €39 million improvement from the €27.7 million loss recorded in H1 2024. This turnaround was driven by stronger operational performance and significantly reduced non-recurring expenses, which decreased from €30.4 million to €8.2 million.
The following waterfall chart illustrates how various factors contributed to SMCP’s organic growth:
Comparable sales growth added €14 million, while wholesale contributed €12 million. These positive factors more than offset the €11 million reduction from network optimization, resulting in the overall 3.0% organic growth.
Regional Performance Analysis
SMCP’s performance varied significantly by region, with strong results in the Americas offsetting continued challenges in Asia:
The Americas region was the standout performer with 11.9% organic growth, accelerating dramatically in Q2 with 21.6% growth compared to just 2% in Q1. EMEA (excluding France) also showed robust performance with 5.9% organic growth, while the domestic French market grew by a more modest 2.3%.
The following slide provides a detailed breakdown of the performance in Europe:
Asia-Pacific remained the only underperforming region, with an 8.0% organic sales decline. However, the company noted progress in its discount reduction strategy in the region:
By brand, Sandro led growth with a 3.4% increase in sales to €302.2 million, while Maje grew by 2.5% to €224.3 million. Other brands (Claudie Pierlot and Fursac) showed more modest growth of 0.6% to €74.6 million.
Profitability and Financial Structure
SMCP’s profitability improved significantly, with adjusted EBIT more than doubling from €18.8 million in H1 2024 to €42.6 million in H1 2025. This improvement was driven by volume effects and cost optimization:
The company maintained its gross margin at 74.3% of sales while improving its retail margin from 27.4% to 29.1% of sales, demonstrating the benefits of its full-price strategy and reduced discount rates.
Net income showed a meaningful improvement, turning positive at €11 million compared to a €27.7 million loss in the same period last year:
SMCP also generated strong free cash flow of €33 million, a €42 million improvement from H1 2024, enabling continued deleveraging. Net debt decreased to €206 million, with the leverage ratio (net debt/adjusted EBITDA) improving significantly from 3.05x to 1.90x:
Strategic Initiatives
The company’s presentation highlighted several strategic initiatives contributing to its improved performance:
1. Network Optimization: SMCP reduced its store count by 20 points of sale in H1 2025, continuing its strategy of focusing on profitable locations while expanding through retail partners.
2. Full-Price Strategy: The company reduced its discount rate by 3 percentage points compared to H1 2024, with particular progress in Europe and Asia.
3. Brand Desirability: SMCP emphasized collaborations such as Sandro x Louise Bourgeois and Maje x K.Jacques, along with an elevated Key Opinion Leader (KOL) strategy featuring celebrities like Eva Longoria, Bella Hadid, and Shia LaBeouf.
4. Sustainability: Claudie Pierlot achieved B Corp certification with a score of 96.7, highlighting the company’s commitment to responsible business practices.
5. International Expansion: The company expanded into new markets through retail partnerships, including store openings in the Philippines and Jordan.
Forward-Looking Statements
Looking ahead, SMCP expressed confidence in its ability to achieve its H2 2026 targets based on the strong H1 2025 performance. The company plans to continue implementing its action plans focused on topline growth and cost optimization, while acknowledging that the external environment "remains uncertain and challenging."
The presentation’s conclusion emphasized that the company is on track to reach its H2 2026 guidance for EBIT margin improvement, supported by the positive results already achieved in H1 2025.
This aligns with the cautious optimism expressed during the Q1 2025 earnings call, where CEO Isabelle Guichot highlighted the company’s agility and strategic pricing adjustments. The H1 results confirm the stabilization in China mentioned during that call, though the region continues to present challenges with an 8% organic sales decline for the half-year.
Full presentation:
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