YNAP makes progress on 5-year plan and says mobile is the future
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YNAP makes progress on 5-year plan and says mobile is the future

Online fashion retailer Yoox Net-a-Porter (YNAP) reported full year earnings earlier this week, confirming that the company was on course to achieve guidance set out in its 5-year plan. The group’s CEO, Federico Marchetti, also told the press that core profit margins would improve this year.

YNAP’s share price has appreciated by 30% so far this year!

graph 0803 ynap

SOURCE: Yahoo Finance

Marchetti said: “(The results) in 2017 and the outlook for 2018 put us on track to meet our five-year plan target and we expect an improvement in adjusted core profit margin between 30-70 basis points this year.” He also described mobile apps as “a key pillar of our strategy,” reiterating that they would be a driver of growth in 2018: “We are investing more money in upgrading and redesigning our apps and we will continue with growth (in mobile sales) month after month.”

YNAP, which operates four unique websites, as well as “online flagship stores” for some of the fashion world’s big hitters (Armani, Moncler, Valentino), wants to increase revenue by 17% - 20% annually, at constant exchange rates, in the years to 2020. So far, it’s on track to deliver that impressive rate of growth.

Full year adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) came in at €169.2 million – in line with analysts expectations – with a margin of 8.1%.

A slower than expected “migration” of products between warehouses last year hampered the group’s sales, leading it to report an increase of “only” 16.9% year on year. That’s something that YNAP will try hard to avoid in the future. Marchetti said: “The migration was a complex process and we learned a lot from our mistakes.” Other goals for the year include consolidating the company’s position in the hard luxury sector (jewelry and watches), and achieving a 30-70 basis point rise in core profit margins.

Disclosure

Dominion holds Yoox Net-a-Porter in its Global Trends Luxury Fund.


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