Sandro Parent SMCP Expects Sales Growth To Slow This Year.

The SMCP SAS (SMCP.PA), the parent of France's luxury luxury brand Sandro and Maje, today warned that the 2019 performance would be further slowed by the turmoil in the European market, which dragged the group's share price down by 10.8% to 14.10 euros in the early days of Thursday, raising its 2019 hike from 4.8% to 17.4% as of Wednesday.

Management now expects sales growth of fixed exchange rate to drop to 9%-11% this year, and in 2018 it has plummeted by 450 basis points to 13% a year, while adjusted EBITDA margins will remain at 16.9%.

For prudent performance prospects, CEO Daniel Lalonde pointed out at the analyst conference call that the French macroeconomic background is now "slightly unstable" and the "yellow vest" campaign has emerged. He also expressed the hope that Britain's prospects for the future of Europe would become clearer as soon as possible.

When the 2018 annual sales figures were released in January, SMCP SAS has revealed that the Paris stores which had led to the "yellow vest" campaign failed to do business on several Saturday, and the number of international passenger traffic also decreased, which lost 4 million euros of the group's annual revenue of 1%, and the domestic market income in the fourth quarter was 1.9% lower than that in the fourth quarter.

Since the beginning of November, the protest campaign has caused a 170 million euro loss in France, which does not include the massive damage done by the "yellow vest" protesters to the famous brand stores and high-end restaurants in Paris last Saturday. HugoBoss Hugo Bosse, Swarovski SWAROVSKI and Longchamp Longjie store were looted.

Daniel Lalonde told analysts that French sales in the first quarter were expected to be flat in the same period last year.

In the 2018 fiscal year, SMCP SAS revenue exceeded 1 billion euros for the first time, up 11.5% to 1 billion 17 million 100 thousand euros compared with the same period last year. Digital sales accounted for 14.7% of the total revenue, of which the penetration rate of the US digital business reached 25%. The penetration rate of Mainland China has been close to the group average after doubled last year. Daniel Lalonde revealed that the group will also increase its electricity supplier partners in the mainland this year to further expand its digital layout.

Adjusted EBITDA (profit before interest tax depreciation and amortization) increased by 11.6% to 171 million 500 thousand euros per annum, the profit margin edged up 10 basis points to 16.9%, and net profit increased from 6 million 300 thousand euros in 2017 to 50 million 200 thousand euros. The group went public in 2017, resulting in a one-time expenditure which weakened profitability.

Jefferies LLC analysts believe that the group's performance is in line with expectations, but the outlook is relatively disappointing.

The SMCP SAS, which is controlled by Shandong Ruyi group (002193), focused on expansion of accessories, men's clothing and digital channels in 2019, and will continue to focus on developing retail networks in China and Europe. But this year's sales target is only 100. Last year, the group added 134 outlets, and the total sales point reached 1466 by the end of 2018.

Daniel Lalonde said that the Greater China region will continue to account for 40% of the new store plan this year. At the same time, it has revealed that the region is "exceeding expectations" and has started "very positive" this year.

At a conference call in January, he pointed out that the momentum of Greater China was not affected by the tense trade relations between China and the United States. Any slowdown in the group was only related to the high contrast base.

The Greater China region achieved 20% sales growth in the four quarter, and is expected to maintain at least 20% growth this year. "We still have confidence in the region," he told analysts.

SMCP SAS (SMCP.PA) closed 14.63 euros on Thursday, down 7.4% from a full day, and now has a market value of about 1 billion 100 million euros.