July 28, 2017 / 7:42 PM / 2 years ago

Geox expects to meet 2017 expectations due to wholesale, e-commerce

Geox shoes are seen in a shop in Rome, Italy, April 10, 2016. REUTERS/Max Rossi

(Reuters) - Italian shoemaker Geox (GEO.MI) expects a slight increase in turnover and profitability growth in line with challenging market expectations in 2017, it said on Friday.

The company reported a 0.2 percent increase in first-half sales to 451.1 million euros ($529.91 million) as the wholesale and e-commerce channels offset the effects of an overhaul in its retail business.

Its wholesale business, which makes up 45 percent of revenue, saw growth of 6.7 percent driven by Russia, Eastern Europe and China while e-commerce grew 30 percent.

The maker of breathable yet waterproof footwear expects wholesale to remain one of its main drivers for the rest of the year.

Like-for-like sales should turn slightly positive as well in 2017 after a 0.9 percent fall in the first half of the year.

Earnings before interest, taxes, depreciation and amortization rose 57 percent to 34.7 million euros in the first half of the year.

The company-provided consensus, disclosed in March, of analyst forecasts for 2017 EBITDA is 76 million euros.

Geox added that gross margin for the fall-winter order backlog is on track with an increase of over 200 basis points.

Chief Executive Officer Gregorio Borgo said in a conference call on Friday that Geox expects gross margin to expand in 2018 by 150 basis points helped by a weak U.S. dollar.

Reporting by Silvia Recchimuzzi in Gdynia

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