A weak quarter with a strong focus on taking the company into the future

The MQ Group had a weak fourth quarter with weak sales and lower earnings. Less clearance stock has adversely affected traffic and therefore sales, but also entails less price reduction in the business overall. MQ’s online shopping segment, on the other hand, is showing strong development with more customers and a higher conversion rate, which is fully in line with our expectations in this prioritised area. During the year, our new Executive Management Team and all our dedicated employees have laid the foundation and set the course for taking the company into the future. We are working actively to reposition and renew MQ and have intensified our efforts over the past quarter, and we look forward to presenting these developments to our customers during this autumn.  

Fourth quarter (June – August 2019)  

• Net sales amounted to SEK 406 million (445), down 8.8 per cent. Like-for-like sales declined 7.8 per cent (according to the Swedish Retail Institute Index, HUI, the market’s comparable stores increased 1.3 per cent).  
• The gross margin was 47.8 per cent (47.5). 
• Operating profit/loss was SEK -22 million (-8), which corresponds to an operating margin of -5.5 per cent (-1.7).  
• Profit/loss after tax for the period amounted to SEK -13 million (-3), which equates to basic and diluted earnings per share of SEK -0.12 (-0.06).  
• Cash flow from operating activities was SEK -22 million (31). The negative cash flow compared to the same quarter in the previous year relates in part to lower earnings, as well as lower use of overdraft facilities.  

Financial year (September 2018 – August 2019) 

• Net sales amounted to SEK 1,611 million (1,735), down 7.1 per cent. Like-for-like sales declined 6.9 per cent (according to the Swedish Retail Institute Index, HUI, the market’s comparable stores declined by 2.2 per cent). 
• The gross margin was 54.4 per cent (55.6). 
• Operating profit/loss amounted to SEK -543 million (51), including a writing down intangible assets of SEK -500 million and non-recurring costs of SEK -18 (-2), which equates to an operating margin of -33.7 per cent (2.9).  
• Operating profit/loss excluding write-down of intangible assets amounted to SEK -43 million (51), which equates to an operating margin of -2.7 per cent (2.9). 
• Profit/loss for the period amounted to SEK -537 million (41), including a writing down intangible assets of SEK -500 million and non-recurring costs of SEK -18 (-2), which equates to basic and diluted earnings per share of SEK -10.07 (0.85).  
• Profit/loss for the period excluding write-down of intangible assets amounted to SEK -37 million (41), which equates to basic and diluted earnings per share of SEK -0.69 (0.85).  
• Cash flow from operating activities was SEK -51 million (78). The negative cash flow mainly attributable to lower earnings, but also higher working capital affected among other things by goods in transit.  
• The Board proposes that no dividend be paid for the 2018/2019 financial year in order to create scope to strengthen the company’s development moving forward (-).  

For further information, please contact: 

Ingvar Larsson, President and CEO: +46 (0)31-388 80 70 

Ola Wahlström, CFO: +46 (0)31-388 80 80 

This information is information that MQ Holding AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, on 4 October 2019 at 07:15 CET.  

MQ Holding AB owns and operates fashion stores under two business areas: MQ and JOY. MQ is Sweden’s largest retailer of fashion brands. Through a select mix of proprietary and external brands, MQ offers high-fashion menswear and womenswear in attractive stores. JOY targets fashion-conscious women at midlife who desire excellent quality, fit and comfort. The two business areas currently comprise a total of 163 stores as well as online sales. The MQ Holding share has been listed on Nasdaq OMX Stockholm since June 18th 2010. For more information, please visit our website at www.mq.se.