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Investing.com -- Maisons du Monde’s financial release indicated a mixed performance, with the company posting a slight EBIT gain and a net income loss. Despite a challenging year, the home decor company managed to slightly reduce its net debt and announced cost-saving initiatives aimed at improving future performance.
The company’s earnings for 2024 came in globally in line with estimates but fell below the consensus. A notable positive was the gross margin improvement by 80 basis points to 64%, attributed to decreased freight costs and contributions from the marketplace.
However, EBITDA margin dropped to 14.5% from 18.4% the previous year after an 11% decline in the top line. The company managed to achieve a symbolically positive EBIT at €1.2 million, but net losses widened to €115 million, exacerbated by an impairment of €81 million on historical goodwill.
Net debt excluding IFRS 16 saw a modest reduction of €5 million, bolstered by improved working capital and lower capital expenditures. Lease obligations also decreased by €50 million, reflecting network rationalization and successful negotiations with landlords.
Looking forward, Maisons du Monde has not provided specific guidance for 2025 but aims to revamp 100 stores by year-end while maintaining a capex/sales ratio around 2.5%. Over the next two years, the company plans to enhance cost savings to more than €100 million over three years, an increase from the previous target of €85 million, with approximately €60 million expected to be realized in 2025-2026.
Additionally, working capital is projected to improve by one month compared to 2024, mainly through inventory reduction and a further reduction of SKUs by around 10%.
Bernstein analysts commented on the results, stating: "These results do not come as a surprise after the group announced on February 4 its annual sales below the consensus’ expectations, as well as a new plan to cut 91 jobs at its headquarters.
We do not expect the share price to react significantly to this publication. In the medium term, the stock rerating will depend on the execution of the ’inspire Everyday’ plan, which is taking longer than expected to bear fruits."
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