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Wittchen SAWittchen aims to achieve gross margin of 63-64 pct
Listed leather products manufacturer and retailer Wittchen wants to achieve a gross margin of 63-64 percent, CEO Jedrzej Wittchen told a press conference. In the fourth quarter of 2024, the group plans, among other things, to improve the terms of its cooperation with marketplaces and hopes to optimise commission costs.
"We are not satisfied with what we achieved over the last quarter, what is happening this year. We realise the seriousness of the situation, but the market situation, the macro and microenvironment (...) caused us not to be able to execute the plans as we would have liked," CEO Jedrzej Wittchen said.
"(...) I can assure you that we are making sure that we get back on track quickly," he added.
Gross margin on sales in the third quarter of 2024 fell by 2.2 percent year on year to 60.1 percent.
"Regarding the gross margin, it is not the peak, but we think that a result above 60 percent is not bad. We will do our best to reach 63-64 percent," the CEO said.
"In the fourth quarter of 2024, we are not changing our strategy. (...) We have a bit of a problem with the cooperation with the marketplaces. (...) Marketplaces are focused on profits, but their own, not the companies that sell for them. It's about learning to work together and share the profits made in a sensible way," he added.
The presentation at the conference indicated that Wittchen's plans for the fourth quarter include - in addition to improving the terms of cooperation with marketplaces - an image campaign in Poland (including TV advertising) and strengthening the brand on foreign markets, expanding the assortment on leading platforms, as well as preparing for the construction of a new hall (documentation and designs).
It was pointed out that the company hopes to optimise commission costs in connection with the activities to be undertaken in the last quarter of 2024.
Among the risks that may arise in the fourth quarter, it was pointed out that consumer demand has weakened, supply chains are labile and transport costs and competition has intensified from Asian sales platforms.
"We act in such a way that when we don't meet sales targets, we tighten the cost loop to the max. Of course, we control these costs, we save where we need to. We recently decided to do a TV campaign in Poland and further improve our image," Jedrzej Wittchen said.
"Next year the first lines of elegant shirts and other things will appear, we will give details at future conferences. In turn, there will be another range this year - a gift assortment - fragrances, candles and similar things," he added.
In the third quarter of 2024 Wittchen posted EBITDA of PLN 19.3 million (EUR 4.4 mln) against PAP Biznes consensus of PLN 22.8 million (EUR 5.3 mln), net profit of PLN 8.7 million (EUR 2 mln) against consensus of PLN 11.3 million (EUR 2.6 mln).
In the third quarter, the company generated revenue of PLN 115.3 million (EUR 26.6 mln), against a consensus of PLN 115.2 million (EUR 26.5 mln).
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