(News Bulletin 247) – The textile group is once again lowering its growth and margin targets for 2023, noting a deterioration in the economic context. SMCP takes the hit on the Paris Stock Exchange.

Friday evening is a day favored by listed companies for delivering bad news. Including SMCP, which took advantage of a weekend eve to announce a warning on its results.

The same day, the luxury giant LVMH jumped 12.8% on the Paris Stock Exchange, investors then welcomed the excellent annual results of the luxury giant. The group’s publication demonstrates the resilience of the world’s number one luxury company at a time when demand is slowing.

This is not the case for the owner of the Sandro, Maje, Claudie Pierlot and Fursac brands, which has once again lowered its growth and margin targets for 2023. This profit warning comes after a trying end to the year. for the accessible luxury specialist, who advances “a degraded macroeconomic context”. He cites in particular increased geopolitical tensions, sluggish household consumption and persistent inflation.

Over the last three months of 2023, SMCP indicates stability in its sales compared to 2022 at constant rates, which reflects a turnover close to the 332 million euros published for 2022. The group explains that its activity held up in the United States, which made it possible to compensate for a “difficult” December in Europe, and in particular in France. In China, SMCP noted “less dynamic than expected” activity in the country.

A deterioration of the market environment

The deterioration of this market environment has once again forced the company to lower some of its financial objectives for the current year, after a previous adjustment last September.

Like many ready-to-wear brands, SMCP has also been caught up in the purchasing power crisis despite its “accessible luxury” positioning. The company now expects to deliver “a slightly weaker performance than announced”. The group is now targeting a turnover of 1.23 billion euros, i.e. growth at constant rates of 3.8% in 2023, compared to “mid-single digit” growth. around 5%) anticipated so far.

SMCP’s profitability will also be worse than expected. The adjusted operating profit margin (EBIT) is therefore expected between 6.4% and 6.6% of turnover, compared to a previous estimate of 7% to 9%. Which reflects a clear drop compared to the 9.2% posted in 2022.

At the same time, the textile group says it has accelerated its savings plan in the last quarter of 2023, without specifying the extent, and has continued to make its financial strength a priority, including a reduction in its net debt at the end of December 2023. .

The objectives announced today contrast with the optimism displayed by SMCP in March 2023. The company then expected sales growth “in the mid to high single digit range” (i.e. between 5% and 9%) compared to 2022. , and an improvement in its adjusted operating profit (Ebit) margin.

The new profit warning launched by SMCP on Friday evening illustrates the difficulties of distribution players in evolving in a context marked by a serious consumer crisis. At the end of last week, Maisons du Monde published declining sales in 2023 for the second year in a row. “In the fourth quarter, discretionary consumption remained sluggish across Europe, in a context of fluctuating inflation and low consumer confidence,” Maisons du Monde conceded in its press release.

A discounted title

On the Paris Stock Exchange, the title of the owner of the Sandro, Maje, Claudie Pierlot and Fursac brands is taking a hit after this new profit warning. The stock lost another 8.3% around 11:45 a.m., after having plunged 16.3% in early trading to a new historic low of 2.40 euros. Only Eutelsat did worse (-15%) here too, following a profit warning. And since the start of the year, the meters have not been looking good for SMCP, which is losing more than 22%, after having already conceded more than 47% in 2023.

The company will therefore have a lot to do to restore its stock market image. SMCP will detail the rest of its annual results on February 28, and will provide on this occasion additional information on the progress of its savings plan for 2024.