Australia’s Globe International Limited’s sales up 3% in 2022


The sales of Globe International Limited for 2022 were $274.5 million, 3 per cent higher than the prior comparative period. The group reported a small increase in sales and solid profitability despite challenging economic conditions putting downward pressure on both margins and consumer demand, particularly in the latter part of the financial year.

Sales growth was driven by the group’s major apparel and footwear brands, but this was largely offset by a reduction in sales of the group’s hardgoods brands. Despite the decline in the momentum of the hardgoods brands, they continue to trade profitably, and sales are significantly higher than they were prior to the pandemic. From a regional perspective, the North American business drove the increase in sales, delivering a 9 per cent increase over the prior year in local currency terms. Meanwhile the more established Australian business experienced a 3 per cent decline in sales, partially impacted by extended lockdowns in the first half of the financial year. European sales also declined by 3 per cent in local currency terms, due to the contraction of the hardgoods market, the company said in a press release.

The sales of Globe International Limited for 2022 were $274.5 million, 3 per cent higher than the prior comparative period. The group reported a small increase in sales and solid profitability despite challenging economic conditions putting downward pressure on both margins and consumer demand, particularly in the latter part of the financial year.

“I’m proud of the result we have delivered this year, given all the various challenges that have been thrown at us. Sales were at a record level, and we have delivered a 10 per cent EBIT return on sales which supports the return of 32-cents in dividends to shareholders, both of which were significantly higher than in the 10 years prior to 2021. After the extraordinary highs experienced throughout FY21, with record profits driven by all brands and a high proportion of online sales, we were prepared for some earnings normalisation during the 2022 financial year. As it turned out, there was more negative pressure on profit margins than we had expected due mainly to continued global logistics issues and the macroeconomic impact of rising interest rates and inflation. Despite this, we have delivered a strong result due to the strength and diversity of our segment leading brands, which are showing resilience and new levels of scale even with the challenging macro conditions,” Matt Hill, chief executive officer at Globe International Limited, said.

The $27.5 million EBIT reported for the year generated a return of 10 per cent on net sales, compared to 17.5 per cent in the previous corresponding year. Some decline in profitability was anticipated as it related to the normalization of the sales mix and an increase in the cost base to support the step-up in the size of the business that occurred during 2021. However, there were additional factors that were not anticipated. This included major shipping delays in Q1 leading to cancelled orders, the softening of the hardgoods market from Q2, rising inflation and interest rates starting to take a toll on margins and softening consumer demand throughout H2, the strength of the US dollar, and the excessive cost of moving goods around the world.

“In the last quarter of the financial year we noticed a change in consumer behaviour as rising interest rates and inflationary pressures started to impact discretionary spending. We expect that this will lead to downward pressure on our sales trajectory into the next financial year, but we will continue to look for opportunities to grow and supplement our existing brands to maintain the scale we have achieved over the last 2 years. In addition, we will continue to do what we can to mitigate the impacts of inflationary pressure on our bottom line,” Hill said.

“The board determined the final dividend having regard to overall earnings and cash generation over the last two financial years. This is after 2021 dividends were cautiously paid at just 40 per cent of NPAT, having regard to ongoing uncertainty in the market and the significant operating and capital expenditure cash outflows expected in 2022. Over 2 years, the NPAT pay-out ratio is 56 per cent. For the 2023 financial year, dividends will be determined based on the performance for the FY23 year alone. Therefore, full year dividends should be expected to be lower than dividends paid in relation to the 2022 financial year, which were the equal highest dividends ever paid by the company,” Hill advised.

Fibre2Fashion News Desk (RR)



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