The French fashion group SMCP has recently revealed that its sales and adjusted earnings for 2023 are projected to be slightly below expectations. The company cited a challenging December in Europe, particularly in France, and China as the main reasons for this setback.
Annual sales for SMCP are expected to reach around €1.23 billion ($1.33 billion), representing a constant-currency growth rate of 3.8% from the previous year. While this is still positive growth, it falls short of the mid-single digit growth that was originally anticipated.
Additionally, SMCP’s closely watched adjusted earnings before interest and taxes (EBIT) margin is projected to range from 6.4% to 6.6% of sales, which is lower than the previously guided range of 7% to 9%.
The company reported that its sales in the fourth quarter remained stable compared to the previous year at constant exchange rates. However, the macroeconomic context during this period was marked by geopolitical tensions, weak household consumption, and persistent inflation.
This announcement comes four months after SMCP had already revised its sales and profitability forecasts for the year. Inflation has been impacting consumer spending across Europe, while China has not shown the expected trajectory in terms of consumption.
While the update from SMCP is disappointing, the company remains committed to navigating these challenges and pursuing growth opportunities in the future.