SMCP (SMCP) H1 2024 earnings summary

Executive summary

• H1 2024 sales reached €585 million, down 3.6% organically year-over-year, with resilience in Europe and America offsetting a sharp decline in China and APAC; Sandro and Maje performed well outside China.

• Sequential improvement was seen in Q2, especially in France and Europe, while digital sales remained above 20% of total.

• Strict financial discipline led to net debt reduction to €293 million and a gross margin improvement to 74.3% of sales.

• Sustainability initiatives resulted in a 15% CO2 emissions reduction from 2022 to 2023 and new Diversity & Inclusion policies.

• Action plan targets a €25 million EBIT improvement by 2026, with ongoing digital, retail, and wholesale initiatives.

Financial highlights

• Organic sales declined 3.6% year-over-year to €585 million; like-for-like sales fell 5.5%.

• Adjusted EBIT was €19 million (3.2% margin), down from €36 million in H1 2023, impacted by restructuring and macro factors.

• Net income was -€28 million, mainly due to €30 million in non-cash impairments and restructuring costs; breakeven before these items.

• Free cash flow was -€8.8 million, stable year-over-year, supported by inventory and capex control.

• Adjusted EBITDA margin decreased to 16.8% from 19.0% in H1 2023.

Outlook and guidance

• H2 expected to benefit from more favorable comps starting August and positive reception of fall-winter collections.

• Store closure plan in China to continue, with about 40 closures planned in H2, impacting sales more than in H1.

• Network optimization and Claudie Pierlot repositioning to continue in H2 2024; retail partner activity to accelerate, including first openings in India and Southeast Asia.

• Cost control measures underway, with some benefits expected in 2024 and more in 2025–2026.

• EBIT improvement target of €25 million by 2026 reaffirmed.