Increase in sales by 21%, improvement in gross margin on sales by 0.4 percentage point and expanding the product portfolio
The third quarter of 2019 is for the CCC Group a further, sustainable development of the sales network, as well as the introduction of new product categories, mainly due to the collection of autumn-winter brand Gino Rossi, which debuted in CCC stores. The past three months have also been marked by intensive development of e-commerce, at the forefront of the award-winning mobile application CCC, which gained full functionality of the online store. E-commerce is consistently gaining in importance in the CCC Group (25% of turnover in Q3 2019), still mainly due to eobuwie.pl, which is already present in 15 countries.
Sales of the CCC Group in the third quarter of 2019 amounted to PLN 1,440 billion, which means an increase by 21% on a year-to-year basis. Distinguishing sales dynamics in the CCC Group were reported in the chains of stores in Serbia, Russia and Bulgaria (increase by 46%, 42% and 31% y/y respectively), which constitute markets with a large growth potential for CCC. The increase in sales in the CCC Group was influenced by the expansion of the chain of stores (increase in area by 16%) and the dynamically growing e-commerce channel (mainly eobuwie.pl, +34% y/y), as well as the consistently developed product offer. More and more important is the CCC e-commerce launched at the end of June this year, which in the third quarter constituted 2% of the revenues of the CCC network in Poland.
Gross profit on sales at the consolidated level increased by 22% to PLN 687 million. Gross margin in the CCC Group reached the level of 48%, y/y higher by 0.4 pp, which is a satisfactory result in the context of the consistently growing share of branded sports footwear. This phenomenon was more than compensated for by the development of private labels. Shoe brand Gino Rossi, as well as the autumn-winter collection of DeeZee appeared in the offer of CCC stores for the first time.
Costs amounted to PLN 669m (PLN 560m in Q3 2018). The increase in this respect results mainly from the expansion of retail space, the scale of e-commerce and consolidation of the acquired companies (Gino Rossi, DeeZee). Finally, CCC Group recorded EBITDA of PLN 201m (increased 23% y/y) and operating profit of PLN 16m (PLN 30m in Q3 2018) in the third quarter.
"CCC has consistently been developing a product. The collection is complemented by other private labels - in the spring it was DeeZee, and in the autumn Gino Rossi appeared on the shelves. The importance of branded sports products is also growing steadily. We are increasingly meeting the expectations of our customers. We systematically strengthen the e-commerce character of the Group. Noteworthy is the development of Modivo platform with complete premium fashion. On the cost side, positive effects of integration of the acquired companies (KVAG and Gino Rossi) can already be seen. We are optimistic about the results in the coming quarters, looking at product development and cost discipline progress.", comments Marcin Czyczerski, President of the Management Board of CCC S.A.
