OSLO, Jan 2 (Reuters) - XXL, the Nordic region’s largest sports retailer, warned on Thursday of a sharp decline in fourth-quarter sales, blaming heavy discounting across the industry and warm winter weather that hurt demand.
It was the latest in a series of sales and profit warnings since 2018 by XXL, which last October raised cash from shareholders in order to boost its balance sheet.
Overall 2019 revenue fell to around 9.0 billion Norwegian crowns ($1.02 billion) from 9.5 billion a year ago. But on a like-for-like basis, sales were down 12% in the fourth quarter, XXL said in a statement.
“December and in particular Christmas sales have been weak,” the retailer said.
While XXL expects full-year earnings before interest, tax, depreciation and amortisation (EBITDA) to be in the range of 870 million to 900 million crowns, up from 736 million reported for the first nine months, it had yet to decide whether it needed to write down the value of its inventory.
“XXL expects to be in compliance with applicable loan covenants in the fourth quarter of 2019,” it added.
The company’s full fourth-quarter earnings report is due on Feb. 7.
XXL’s shares are down 82% in the last 24 months, closing at 16.94 Norwegian crowns ahead of Thursday’s warning, up from an all-time low of 15 crowns in November. ($1 = 8.8049 Norwegian crowns) (Reporting by Terje Solsvik; Editing by Lisa Shumaker)
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