Italian shoe manufacturer Geox' first quarter of 2014 resulted in a net profit drop of nearly 50 %, despite a small turnover increase.
Geox's first quarter turnover reached 268.5 million euro, a 2.3 % increase compared to the year before. Sales in its own stores improved remarkably, with a 45.2 % increase to 77 million euro and even the like-for-like turnover grew 20 % in these stores.
Higher production costs and an aggressive promotional campaign during the seasonal sales have impacted profit margins, which resulted in a 47 % profit drop to 27.8 million euro. Last year, it managed 40.5 million euro in profit in the first quarter.
Geox' turnover increase is a positive sign, as 2013's turnover dropped 20 % mainly because of the difficult situation in Italy and Spain, but things are picking up in this particular region. Italy grew 8.3 % in the first quarter to 97 million euro.
European turnover remained stable elsewhere, but North and South American sales dropped 4.8 % and the rest of the world grew 1 % in total.
Clothing proved the biggest growth factor in the company, with an 11 % turnover increase. Clothing now represents nearly 14 % of Geox' total turnover.