Published at 10:01 am
Tendam posts 17.7% increase in EBITDA in the first quarter of its 2023 financial year
In relation to the company’s results for the first quarter of its financial year 2023/2024 Tendam Chairman and CEO Jaume Miquelsaid:
“The first quarter of our 2023 financial year was excellent. All brands, formats and channels put in a strong performance and contributed positively to business profitability. The initiatives rolled out under the Tendam 5.0 strategy outperformed in particular, delivering almost 45% of net growth over the quarter and positioning themselves as key growth drivers in a very short space of time.”
Tendam Brands, the parent company of Tendam, one of Europe’s leading omni-channel fashion retailers and the second largest operator in the Spanish market by market share, has today announced its results for the period from 1 March through 31 May 2023, corresponding to the first quarter of its 2023-24 financial year.
EBITDA for the first quarter climbed to €51.9 million, up 17.7% versus the comparable quarter of last year and +16.3% versus pre-pandemic figures in 2019.
Tendam’s total sales for the period stood at €243.2 million, rising by 3.6% year on year. Like-for-like sales were up 4.1% year on year and 11.1% versus 2019. Despite the impact of rising interest rates in particular on the current consumer spending landscape, the company maintained a strong commercial value proposition and significantly improved its profit margins.
Tendam’s gross margin expanded considerably over the first quarter to stand at 68.2%, rising 2.3 percentage points year on year and outperforming pre-pandemic figures. The key drivers behind the growth in gross margin – which comfortably outperformed the sector average – were the efficient management of the company’s operations and the strong positioning of Tendam’s brands in the premium mass market segment, along with the downward trend in inflationary pressure and particularly in the cost of global transport.
The Tendam 5.0 strategy is making strong headway and Tendam now operates as a single open ecosystem which efficiently harnesses almost 400 million customers, 11 own brands and more than 150 third-party brands, and seamlessly integrates the digital and physical businesses, both in terms of logistics and sales.
New initiatives under the Tendam 5.0 strategy represented 44.6% of the net growth posted over the quarter and accounted for 5.1% of the group’s sales. Online sales through the multi-brand third-party platform were up 75.5% year on year, contributing +18.1% to Tendam’s net quarterly growth.
The digital business continued to grow, posting a 4.1% increase in profitability. There were three key drivers behind this outstanding result: the increase in the number of third-party brands on the multi-brand platform from 90 to 150 over the last 12 months; strong growth in the click-shopping format, which accounted for 31.5% of digital sales in versus 24.1% in the first quarter of 2022; and the lower impact of logistics costs thanks to a low, stable return rate of 27.9%.
At the end of the first quarter of financial year 2023/24, Tendam’s store network totalled 1,804 points of sale. Directly-operated stores continued to drive up footfall consistently and posted like-for-like growth of 4.8%. Tendam grew its store network from March to May 2023, with five net openings of directly-operated stores and six new franchises. In the last twelve months, the franchise network has chalked up 47 net openings.
The number of loyalty club members and associated sales continue to post consistent growth quarter after quarter. At 31 May 2023, Tendam had a total of 33.3 million loyalty club members, having added 2.5 million partners over the last twelve months, an increase of 8.2%.
Tendam continues to make strong inroads with its strategy and comfortably outperforming the targets outlined in its sustainability plan. At the end of the first quarter of its 2023/24 tax year, the proportion of products with sustainable content stood at 46% and emissions were down 16% (Scope 1&2 -74% and Scope 3 -14%) versus the 2019 baseline, despite the impact of the energy crisis and the war in Ukraine.
Tendam Chairman and CEO Jaume Miquel concluded:
“Despite the current macroeconomic uncertainty, we maintain our positive outlook and our goal of delivering sustained growth whilst maintaining Tendam’s strong levels of profitability. Sales are enjoying robust growth in the second quarter with a consistent improvement in margins, so we expect the results for the first half of the year to be excellent.”
Tendam is Spain’s second largest specialist fashion retailer by market share, according to data by Kantar.
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