OVS (OVS) Q2 2025 earnings summary

Executive summary

• Net sales reached €761.7 million in H1 2024, up 3.6% year-over-year, with strong Q1 and continued growth in Q2 despite adverse weather.

• Gross margin improved to 59.6%, up nearly 200 basis points from H1 2023, driven by better purchasing and markdown management.

• EBITDA rose to €89.0 million, with a margin near 12%, and net income increased to €34.6 million.

• UPIM brand sales grew 7.3% with 26% EBITDA growth, while OVS brand sales increased 2.5% with flat EBITDA due to higher marketing investments.

• Positive sales momentum continued into August and September, with September showing double-digit growth and year-to-date like-for-like sales exceeding 5%.

Financial highlights

• Net sales: €761.7 million (+3.6% vs. H1 2023); gross margin: 59.6% (+192bps); EBITDA: €89.0 million (+3.0%); EBIT: €57.3 million (+4.8%); net income: €34.6 million (+2.8%).

• EBITDA margin: 11.7%; EBIT margin: 7.5%; net profit margin: 4.5%.

• Net debt stood at €263.0 million, with leverage at 1.38x EBITDA; adjusted for treasury shares, leverage would be 1.09x.

• Working capital reduced by €11 million year-over-year; inventory in hand 8% lower, but higher stock in transit due to Suez Canal delays.

• CapEx reached €46.2 million in H1, focused on store refurbishments, logistics automation, and digital transformation.

Outlook and guidance

• Expect continued gross margin growth for full year 2024, with a slight decrease in H2 due to dollar effects but still above last year.

• August sales in directly operated stores up 7%; September sales growing double-digit, boosting margins and cash generation.

• New and autumn collections are well received, supporting optimism for Q3 and full-year performance.

• Optimistic for further sales and earnings growth in H2, supported by strong September trading and favorable weather.

• Tax rate for 2024 projected at 25%-26%, with increases due to new international regulations.