SMCP, the French fashion group that owns popular brands such as Sandro, Maje, Claudie Pierlot, and Fursac, has revised down its sales and profitability forecasts for the year. The company cited deteriorating market conditions since the end of July, with inflation impacting consumer spending in Europe and disappointing consumption trends in China.
Initially projecting mid- to high-single digit sales growth at constant currency compared to last year, SMCP now expects mid-single digit growth instead. This downward revision is primarily due to sluggish consumption in France, where inflation has had a significant impact since the beginning of August. Other countries, including Switzerland and Italy, have also felt the effects.
In addition to lowering its sales forecast, SMCP has adjusted its projections for adjusted earnings before interest and taxes (EBIT) margin. The company now anticipates a margin between 7% and 9%, down from its previous projection above last year’s 9.2% result.
The disappointing consumption trends in China, as highlighted by key indicators, have further contributed to SMCP’s revised outlook. Despite optimistic expectations, consumer spending in China has not followed the anticipated trajectory.
It remains to be seen how SMCP will navigate these challenging market conditions. However, with a strong brand portfolio and a track record of success, the company is likely to adapt and implement strategies to mitigate the impact of these headwinds.
Written by Mauro Orru