(Reuters) - Italian shoemaker Geox (GEO.MI) gave a cautious outlook for full year revenue after a steep first quarter sales drop due to a retail overhaul, lower discounted sales and poor weather.
While confirming that it expected profitability to grow for the full year, Geox said on Tuesday that a certain degree of prudence for revenue forecasts would be required.
Geox also said that its retail overhaul at directly-operated stores was ‘substantially’ completed but it was still working to to rationalise third-party outlets.
The company, which earlier this year appointed former top Gucci executive Matteo Mascazzini to replace Gregorio Borgo as its chief executive, said first-quarter sales fell 11.2 percent to 264.5 million euros ($314 million)..
But Geox said that its performance in April and May was recovering as the weather improved, with like-for-like sales for directly-operated stores showing ‘strong’ improvements.
Geox chairman and founder Mario Moretti Polegato said that poor weather conditions contributed to lower footfall and sales as well as slowing down order shipping.
Lower discounted sales were due to the decision to reduce stock levels for the winter season in order to protect margin performance and support cash generation, Polegato said.
Reporting by Silvia Recchimuzzi in Gdynia; Editing by Alexander Smith