Jimmy Choo first-half profit surges, surpassing previous year’s profit

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Jimmy Choo

Jimmy Choo enjoyed a sharp rise in profits and sales in its first half, with pre-tax profits alone almost tripling year-on-year and surpassing the full-year profit recorded in 2016.

The results have prompted the British retailer to fee confident about the remainder of the year, especially after Michael Kors acquired the business in July for £896 million.

The luxury brand’s adjusted EBITDA increased 19.5 per cent to £37.4 million for the six months to June 30, while adjusted EBIT grew 24.5 per cent to £26.9 million.

However, its pre-tax profit of £18.1 million in same period is almost triple the  £6.6 million profit that was recorded a year earlier, and surpasses the £17.7 million full-year profit recorded in 2016.

Meanwhile, like-for-like retail sales had a 3.5 per cent uptick in the first half of 2017, while total revenue rose by 16.5 per cent to £201.6 million boosted by foreign-exchange movements.

On a constant currency basis, total revenue went up by 4.5 per cent.

Jimmy Choo said its sales had grown ahead of the market, despite a challenging market environment.

READ MORE:  Michael Kors buys Jimmy Choo for $1.35bn

Retail revenue grew by 19 per cent, wholesale revenue went up by 10 per cent while licensing and other revenue rose 40 per cent.

The business also recorded significant improvement in net debt.

Jimmy Choo chief executive Pierre Denis said the company’s performance was a result of “strong underlying cash conversion”, which meant the business was able to reduce the level of its debt by rapidly selling assets.

“Our long-term growth strategy is to nurture the brand‘s unique DNA, to strive for excellence in business execution and to enhance client experience, in order to deliver superior growth and profitability, as well as leveraging the significant investments we have made in the business to date,” Denis said.

“We have continued to make good progress through the first half and are well positioned to deliver over the remainder of the year.”

Michael Kors’ acquisition of Jimmy Choo is expected to be finalised and complete in the fourth quarter of this year.

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