OSLO/GDANSK (Reuters) - XXL (XXLA.OL), the Nordic region’s largest sports retailer, warned of weaker-than-expected third quarter earnings on Tuesday and said it needed to raise cash, sending its shares tumbling more than 20% to all-time lows.
The company has warned in the last year of weaker results amid a downturn that has hit many European store owners as online shopping gains ground.
Revenues from XXL stores fell by 4% on a like-for-like basis in the third quarter from the same period last year, with the Norwegian operation hit by a 10% decline, XXL said.
“September proved to be a very challenging month. The lower sales volumes have impacted the gross margins negatively as the expected contribution from supplier volume bonuses is significantly lower than last year,” it added.
Oslo-listed XXL aims to raise 500 million Norwegian crowns ($55 million) by issuing new shares at 15 crowns each, a 31.5% discount to Monday’s closing price.
The company’s shares fell 22.6% to an all-time low of 16.95 crowns shortly after the warning. They recovered some losses to trade at 17.98 crowns at 1350 GMT.
XXL’s shares are down 84% from all-time highs in late 2016.
Top shareholders Dolphin Management AS, Altor Fund IV, Ferd AS, ODIN Forvaltning AS and Arctic Funds Plc will inject 400 million crowns, while 100 million crowns is expected to come from the remaining owners, XXL said.
Third-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) were estimated at between 130 million and 135 million Norwegian crowns, the company said. It did not provide a year-ago comparison.
Analysts polled by Refinitiv had expected EBITDA of 329 million crowns.
Reporting by Tommy Lund and Izabela Niemiec, editing by Terje Solsvik and Alexander Smith