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Geox SpA, with a market capitalization of $3.72 billion, reported a 2.4% decline in sales for Q1 2025, amounting to $190 million. Despite the drop in sales, the company improved its adjusted EBIT by approximately 30 basis points. Geox’s net financial position remained stable with bank debt at $108 million, while net working capital stood at $145 million, representing 20% of net sales. The company has focused on cost optimization strategies to recover profitability. According to InvestingPro analysis, the stock currently appears undervalued based on its Fair Value calculation, with analysts maintaining a Strong Buy consensus.
Key Takeaways
- Geox’s Q1 2025 sales decreased by 2.4% to $190 million.
- Adjusted EBIT improved by 30 basis points due to cost optimization.
- The company launched new products and plans further marketing initiatives.
- Geox’s retail network was rationalized from 615 to 594 stores.
- The company anticipates a low single-digit sales decline for 2025.
Company Performance
Geox’s performance in Q1 2025 reflects a challenging market environment, with a 2.4% decrease in sales compared to the previous year. The company’s EBITDA stands at $420.45 million, while maintaining an EV/EBITDA multiple of 12.91x. Despite the sales decline, the company managed to enhance its adjusted EBIT, thanks to effective cost optimization measures. Geox has also been proactive in launching new products and preparing for future marketing campaigns, aiming to bolster its market presence. InvestingPro data reveals the company maintains a FAIR Financial Health Score, with particularly strong momentum metrics. Subscribers can access 12 additional ProTips and detailed financial analysis in the comprehensive Pro Research Report.
Financial Highlights
- Revenue: $190 million, down 2.4% year-over-year
- Adjusted EBIT: Improved by 30 basis points
- Net financial position: Stable, with bank debt at $108 million
- Net working capital: $145 million, 20% of net sales
Outlook & Guidance
Geox expects a low single-digit sales decline for the full year 2025 but remains committed to maintaining profitability and marginality targets. With a current P/E ratio of 116.39 and a debt-to-equity ratio of 1.32, the company faces some financial challenges. The company is focusing on its Renaissance business plan, which involves a two-phase strategy to navigate potential market challenges. Geox plans to launch a marketing campaign in February 2026 and is preparing its Spring/Summer 2026 collection. For detailed analysis of Geox’s valuation metrics and growth potential, investors can access the full suite of financial tools and expert insights on InvestingPro.
Executive Commentary
Victor Mistran, CEO of Geox, emphasized the company’s strategic focus: "2025 marks the first year of implementation on our business plan that is named Renaissance." He expressed confidence in the company’s progress, stating, "We are fully aware of the challenges that lie ahead, but the progress we have made in these first quarters reinforce our confidence."
Risks and Challenges
- Macroeconomic pressures affecting consumer demand
- Sales decline in key markets, particularly outside Europe
- Potential supply chain disruptions
- Market saturation and competitive pressures
- Cost management and optimization challenges
Geox’s strategic initiatives and focus on product innovation are crucial as the company navigates a complex market landscape. The company’s ability to maintain profitability amid declining sales will be key to its future performance.
Full transcript - Geox SpA (GEO) Q1 2025:
Conference Operator, Chorus Call: Good evening. This is the Chorus Call conference operator. Welcome and thank you for joining the JEOX First Quarter twenty twenty five Sales Results Conference Call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions.
At this time, I would like to turn the conference over to Mr. Luca Amadini, Investor Relations Manager of Geos. Please go ahead, sir.
Luca Amadini, Investor Relations Manager, GEOX: Good evening, everybody, and thank you for joining our call today. This is Luca Amadini speaking. I’ll introduce you to today’s co speaker, the group CEO, Mr. Victor Mistran and the CFO, Mr. Matto.
Mr. Mistran will start by providing you a brief overview of our first quarter performance, and then Andrea will dive deeper into financial results. Following that, Eric and Andrea will be happy to take your questions. I would like to remind you that the presentation may contain statements that now reflect reported financial results and other historical information. Any forward looking statements are based on group’s current expectations and projections concerning the future events.
Forward looking statements involve risks, uncertainties and other factors that may cause actual results to differ significantly from what is expressed or implied. Many of these factors are behind the group’s control or estimates. Let me now hand over to our CEO, Mr. Erico Mastron.
Victor Mistran, CEO, GEOX: Good evening, and thank you for joining us today for our first quarter twenty twenty five result presentation. 2025 marks the first year of implementation on our business plan that is named Renaissance. And it is structured in two phases. The first is strategy rerouting and performance improvement and the second acceleration. The result achieved in this quarter are fully aligned with our expectation.
So we are very happy and proud of it. In this context, first quarter sales declined by 2.4% year over year. Nevertheless, it is worth highlighting the solid performance of our web channel that show plus 4.6% increase and which partially offset the weaker performance of the wholesale and retail channel due in particular to the rationalization of the network. In fact, the retail channel, however, recorded a like for like sales in line with the previous year. And this, considering the uncertain macroeconomics environment characterized by persistent pressure on consumers’ demand and evolving geopolitical tension is a great result.
On the profitability side, we are beginning to see the positive effects of the efficiency and cost rationalization measures launched last year, continued in the first part of twenty twenty five and set to progress through the remainder of the 2025 and into 2026 in line with the first phase as mentioned before of our strategy of rerouting induction plan. This measure are delivering tangible benefits in terms of operating profitability, driving adjusted EBIT of the quarter to significantly outperform in respect to last year by approximately three thirty basis points. Alongside these encouraging results on the margin front, I would also like to highlight the early positive feedback we are receiving on some of our recent launched products. In particular, our new Spherica Plus shoes featuring our fast in technology is gaining strong traction across all our main markets, which gives us confidence for the coming quarters and following years. We remain vigilant on the macroeconomics environment, trade policies recently announced under the spotlight.
And as you know, last year, we closed The U. S. Branches, so will not impact our results for this year and the following years. Even if we are not impacted in this measure, we cannot estimate the potential broader consequences of an escalation in the global tension. Looking ahead, our focus remains on maintaining a disciplined and selective approach, investing in the most profitable markets, further optimizing our processes and maintaining strict cost control.
We are fully aware of the challenges that lie ahead, but the progress we have made in these first quarters reinforce our confidence in the directions we have taken and in the medium sustainable of our business model, sustainability of our business model. With that, I now hand over to Andrea Maldi, which who will walk you through our financial performance in greater detail. Please, Andrea.
Andrea Maldi, CFO, GEOX: Thank you, Ricco. Good afternoon, everybody. I will try to deep dive you into the financial quarter results. As we first of all, let me say that we are commenting a good financial quarter where Geosys, despite a slight decrease in sales of about 2.4%, setting the pressure on the sales of the quarter at $190,000,000 is coming back to profitability, thanks to the action on the cost optimization that started last year and are producing results already in the first quarter. The net financial position is stable.
The bank debt is about 108,000,000 and which is is to be compared with the 103,000,000 that we registered at December 24. And the net working capital amounts to $145,000,000 which is 20% of the net sales as of March 2025. If we start from the Page five of the presentation, and we try to have a look at the sales by channel. First of all, we need to discount for the starting point of last year the perimeter of China and U. S, which have two markets that have been closed in the first during the 2024 and which count for a value of $5,000,000 overall.
So we set the starting point at $180,000,000 and we can say that we are pretty flat compared to the results of the first quarter of twenty twenty four. Worth to note is that the wholesale channel registered a decline in sales of about 2,300,000.0 which is mainly driven by a software sell in campaign on spring summer twenty twenty five, mainly in the, let’s say, rest of the world market, which has been partially offset by an increase in terms of timing and acceleration in delivering of our products in the first quarter twenty twenty five. The retail channel registered a decline of €2,300,000 as well, which is 5.5%, and there is a mix of combination of effect. Clearly, there is an important perimeter effect because, as I said, that the number of shops, brick and mortar at December at March ’24 were in the range of 615, while we are now moving into a number of four 594. So the perimeter effect, which is due to the rationalization of these shops and will mitigate it by year end with the opening of new shop, has an impact of about 1,500,000, which is clearly the negative side of the story.
The positive one is that our like for like performance are substantially in line with the first quarter of twenty twenty four, which is clearly good results in a moment in which our industry is affected by strong decline even in the retail in the The US channel. The the web, overall, wholesale web marketplace and our website have been able to compensate the decline of the two other channel with a growth of 4,500,000 mainly driven, as we said, by the positive performance, so like for like of our DOS web. If we try to give a snapshot of the sales of the first quarter by region, and we move to the next page, we can see that clearly Italy, which is our core market and account for the most of our revenue, 30% of our revenue is more or less flat with last year, which is another good result, clearly, with two trends. The wholesale that has a slight decline, while the retail have been able weather and and physical have been able to compensate the decline that we got in the wholesale in Italy. Europe overall is flat, just an increase of 1.8%, which is €2,000,000 And again, we need to point out the switch between a bit of wholesale delay compared to last year with the positive performance of the overall e commerce.
And when we look instead of the rest of the world, we have a higher decline in sales in the region of the 12%. Worth to remind that this is mainly driven by the closing, the perimeter change and the closing of the market of The U. S. And China, which actually determining the vast majority of the change in sales. As usual, we move to a check into the sales by product, and we can see that still, as we know, our apparel business account for 10% of our total sales.
The apparel has seen a decrease of 2,200,000 which clearly have in terms of percentage and higher effect, 6.9%, while overall, the footwell decreased by 1.9%, which is a lower impact in percentage compared to the upper. I think that on page nine, we can have a look at the financial structure. Our operating working capital, as we mentioned, reached the level of 144,000,000 which is clearly higher than December ’4. But it’s when we compare the like for like with the first quarter in terms of given the fact that we have a higher seasonality in the analysis of the working capital, if we compare with the first quarter of twenty twenty four, we have been able to lower from $163,000,000 to 144,000,000 And even if we look at the percentage incidence of the working capital with the sales, we moved from 23.5% to 21.9%, which is a good indicator of how we are managing our inventories and the fact that we are trying to optimize our stock structure in terms of time to market, time to deliver and liquidation of the oil season that we have in our stock. This is clearly impacting in a positive way our financial debt that has reached a value of $1.00 8.
We did increase compared to December 24 of almost roughly it’s about $5,400,000 which is clearly a good result because, clearly, this is the the part of the year in which we are absorbing absorbing capital for for the purchase of the our season on the springsummer and of our products. Again, if we look at the dynamics, we can say that we have we benefit clearly of the increase of the capital increase, 20% to 70% of the capital increase that has been committed and that we are finalized seem to finalize by the June has been already and is granted by the main shareholder has been already accounting our financial debt, which is in the region of the €20,000,000 while we have absorbed capital from our cash from operation for about €26,700,000 including CapEx. Given the fact that, overall, we can see that we are having a very good, let’s say, first quarter because, as we said, despite the fact that we have a decline in sales, we have been able to recover a strong profitability. We have an increase in EBIT of about $6,000,000 compared to last year for the same period, and this is due to clearly to another optimization of cost.
Some of these costs, I think that 60% of the cost will be a timing effect, Another portion will be instead of consolidating our cost base for the rest of the year. Given all this kind of element there, we are looking carefully at what’s going on for the 2025. We remain prudent, and we say that based on the assessment that we made with our business line, our expectation is to have a to confirm the guidelines that have been provided for the mark to the market for the year 2025 with a bit of decline in sales, which is in the region of a single digit, low single digit, and we confirm the trend of profitability and marginality that we have committed to the market. So far, I think that the statement when we look at 2025 is that we think that we are forecasting to have a near in line with the first year of execution of our business plan. Thank you.
And I’m here with Enrico and the team to get your question.
Conference Operator, Chorus Call: Excuse me. This is the Chorus Call conference operator. We will now begin the question and answer session. The first question is from Oriana Cardani of Intrado Sao Paulo. Please go ahead, madam.
Yes, good evening. Thank you for taking my two questions. First one is about the reaction to current uncertainty, macroeconomic uncertainty. Are you considering modifying your CapEx plan in terms of timing or size or accelerating in some aspects your efficiency plan? And my second question regards the product.
Have you already presented the springsummer collection to your main wholesale partners? And can you tell us something about this collection? What kind of innovation have been introduced? Thank you.
Victor Mistran, CEO, GEOX: Good. For the first question, I’ll let Andrea to answer, and I will answer to your second question. Start from the first, Andrea.
Andrea Maldi, CFO, GEOX: Yeah. Thanks, Oriana. If you start from the first one, which was, I got properly, you are ask you are mentioning any kind of contingency plan or evaluation of CapEx decrease or acceleration according to business region. And second, any kind of contingency plan on cost due to the market conditions. In that, you said two very good points.
We are as we said, we are very happy about the way we have closed the financial quarter, but we know that year is really challenging, and we are not forecasting to have a better result than than expected and then committed to the market in 2025. On the other side, we are assessing our testing our sales for 2025, and we know that we might have some decline that, as we said, are in the in the range of a lower single digit. And so far, we have a range, contingency plan in terms of further cost reduction, which is basically 90% is the execution of what we have already planned in 2024 in terms of action. And we think so far that we have the the the power, the capability, sorry, to execute on a contingency saving plan in the range of the $5.05 to 6,000,000, which is able to compensate what we see in quarter one as expectation for the decline in sales in 2025. Therefore, the combination of the two elements give us enough confidence, again, I’m saying so far as of today, to maintain the same level of profitability and EBIT target that we have for the year 2025.
In terms of CapEx, you know that most of our CapEx are invested in the opening of new shops for the retails or refurbishment of the the oldest one, and the other are mainly on the IT structure for the maintenance of our complex IT structure to support the business. Even in this case, we have we are accelerating a bit on the retail structure because we we think that is important in this moment. And now that we have finalized the reduction and the personalization of the shops, we are just making the new opening in the right place where we want to be and where we’re seeing that the shops are going to be profitable. Therefore, we are accelerating a little bit the, let’s say, the opening of diverse shops and franchising in some of the key areas to maintain our sales value. But at the same time, we have been able to provide contingency plan on CapEx in the range of $1.8 and $2,000,000 if needed, that we will execute during the year accordingly to the path of the sales.
I hope that I’ve been able quite a detail. I give to Enrico the stage to comment on the second point.
Victor Mistran, CEO, GEOX: Thank you for the questions. Very important question. First, I believe that the company that makes products need to be focused on the product. And definitely, we did have a lot of sign offs that we need to go back and focus on the products. We do have NPS score by our consumers that says that we need to give back some value for money to the products.
We do have low performances on the sell through of our multichannel stores that require us to be focused on the products. We do have other several KPIs that tell us that we need to be focused on the products. And during the past month, we have been very focused on the product, and we are ready here to launch a new Springs hundred twenty six. And and we are working on several several key moments in in this launch. Number one, the twenty first and twenty second of this May, we are ready to organize sales events.
We we will group each others here at the headquarters with a lot of key account managers, sales reps, customer managers. Everybody is on the road to shows them the new collections that would set a new creative directions, a new style that combine performances, technology, and styles that are the two routes two of the three routes on which we will build our brands. So style, innovations, and sustainability. Second, we are working on on the to organize the showrooms. Made of May, so in in one week, we will have a very good and pretty new showrooms at the headquarter where we will invite most of the most important accounts, especially European accounts, but it was the time to reconnect with the more very important accounts and distributors that we had in Asia or in Middle East East and Latin America.
Number three, we’re working on preparing the fashion week event in September. Number four, we are working to have a kind of preview of the new collection in our flagship stores in order to create a kind of expectations for the consumers. And number five, we are working heavily on the launch of the marketing campaign that we will launch February 2026. So on one side, we did work on the products and very soon you will see not the full collection, but part of it that we set the the the new way we are going to the market. And on the other side, how we communicate this product to the consumers.
So it is a momentum of discontinuity from the past and we hope crossing finger that consumers will appreciate the direction that we are starting to give to GEOX since now.
Conference Operator, Chorus Call: Mr. Amadini, there are no more questions registered at this time.
Luca Amadini, Investor Relations Manager, GEOX: Okay. Perfect. So thank you very much for participating in this call and for pay for staying with us this evening. Let me just give you a quick reminder of the next call on 2025, the first of results that will be held next July. Thank you again, and please feel free to contact myself for any follow ups you may need.
Goodbye, and good evening.
Conference Operator, Chorus Call: Ladies and gentlemen, thank you for joining. The conference is now over.
Andrea Maldi, CFO, GEOX: You
Conference Operator, Chorus Call: may disconnect your telephones.
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