Global Fashion Group (GFG) Q4 2023 earnings summary

Executive summary

• FY 2023 NMV declined 14.2% amid subdued demand; cost actions and stable gross margin supported Q4 Adjusted EBITDA breakeven.

• Entered 2024 with a leaner cost base, lower inventory and continued platform transition; FY 2024 guidance points to further NMV contraction and an Adjusted EBITDA loss.

Financial highlights

• Q4 NMV was €369.3m, down 14.0% YoY at constant currency; revenue was €243.1m, down 16.8%.

• FY 2023 NMV was €1,279.3m, down 14.2% at constant currency; revenue was €838.0m, down 18.0%.

• FY gross profit was €352.9m with a 42.1% margin, down 0.2ppt YoY; Q4 gross profit was €105.9m and gross margin rose 0.9ppt to 43.6%.

• Q4 Adjusted EBITDA was €0.5m, or 0.2% margin, versus -€5.7m in Q4 2022; FY Adjusted EBITDA was -€58.3m versus -€42.3m in FY 2022.

• FY EBIT loss was €178.5m versus €143.5m; FY loss was €179.9m versus €174.8m in FY 2022.

Outlook and guidance

• FY 2024 NMV guidance is down 5%–15% YoY at constant currency, implying €1.1bn–€1.2bn; Adjusted EBITDA guidance is a loss of €25m–€45m.

• Early-2024 topline trends were similar to Q4 2023; priorities include platform transition, inventory efficiency, incremental cost reductions, and capex and leases no higher than 2023.

• Working capital is expected to provide a cash inflow, significantly less than in 2023; the path to breakeven NFCF includes neutral working capital and stable leases.