Continued weak sales but improved inventory situation

Continued weak sales but improved inventory situation


  · KappAhl’s net sales for the period amounted to SEK 1,193 (1,341) million, a
decrease of 11 per cent.
  · The operating profit was SEK 16 (146) million.
  · The gross margin was 58.4 (63.4) per cent and the operating margin was 1.3
(10.9) per cent.
  · Profit/loss after tax was SEK -11 (95) million, which is equivalent to SEK
-0.15 (1.27) per share.
  · Cash flow from operating activities was SEK 30 (157) million.
  · A rights issue of SEK 600 million was completed during the quarter.

 

CEO’S COMMENTS ·

The trend in the fourth quarter has largely continued during the autumn.
Customers have been cautious, which we can see not only from our own figures,
but also from visitor statistics from many shopping centres, and in financial
statistics. At the same time our weak performance continues in the market,
mainly due to our women's range. It will take one or more quarters before the
improvement in the range has an impact.
    It is worth noting that some of the measures taken are already having an
effect. The cost savings can be seen clearly and we are starting to see positive
changes in inventories. It is a well-known fact that reducing inventories is a
difficult balancing act, in that for a period you have to buy in less than you
sell. Renewal of the range may suffer and clearance goods compete with the new
arrivals. This has had a negative effect on earnings during the quarter.
    Geographically we can note that the fast establishment rate in Poland and
the Czech Republic is now clearly burdening earnings. As already communicated,
expansion will be somewhat slower for some time to come.

JOHAN ÅBERG
President and Chief Executive Officer

A telephone conference will be held for analysts, media and investors today at
9.00 a.m. To participate, call +44 207 750 99 50. There will also be a direct
webcast of the presentation available at www.kappahl.com/presentations, or
www.financialhearings.com.

For further information, please contact:
Johan Åberg / President and CEO, tel. +46 704 71 55 22
Håkan Westin, CFO, tel. +46 704 71 56 64

For pictures and other information:
Annette Björklund / Head of public relations, tel. +46 704 71 55 42,
annette.bjorklund@kappahl.com

KappAhl AB (publ) discloses the information provided here pursuant to the
Securities Market Act and/or the Financial Instruments Trading Act. The
information was submitted for publication at 07.30 a.m. on 21 December 2011.

KappAhl is a leading fashion chain with more than 380 stores and 4 900 employees
in Sweden, Norway, Finland, Poland and the Czech Republic. KappAhl sells
value-for-money fashion with a wide appeal – to women, men and children – and
focuses in particular on women aged 30-50 with families. All clothes are from
our own designers. In 1999 KappAhl was the first fashion chain to be
environmentally certified. In the 2010/2011 financial year KappAhl's net sales
were almost SEK 5 billion and operating profit SEK 222 million. KappAhl is
listed on Nasdaq OMX Stockholm. More information can be found at
www.kappahl.com.