IC Drops Most in Seven Years as Sales Slump: Copenhagen Mover
IC Companys A/S (IC), Denmark’s largest publicly traded clothing company, fell the most in more than seven years in Copenhagen trading after saying revenue will contract for a third year in four.
IC declined as much as 19 percent, the biggest drop since Nov. 9, 2004. The stock fell 21.50 kroner, or 17 percent, to 107.50 kroner at 11:12 a.m. local time, making it today’s biggest loser on Copenhagen’s stock exchange.
IC, with brands such as Jackpot and Peak Performance, said warm winter weather and financial turmoil reduced customer spending. RNB Retail and Brands AB (RNBS), Sweden’s No. 3 clothing retailer, yesterday reported declining sales and predicted a weak 2012. H&M AB (HMBB), the Nordic region’s biggest, will report December sales and fourth-quarter earnings on Jan. 26.
“The development shows that IC Companys has been forced into heavy discounting, which should continue in the coming quarters,” Dan Kirk Wejse, an analyst at Nordea Bank AB in Copenhagen, said today in a note. He cut his recommendation on the share to “hold” from “buy.”
IC cut its full-year sales forecast range late yesterday by 200 million kroner ($34.7 million). Revenue for the 12 months ending June 30 will now be 3.7 billion kroner to 3.8 billion kroner, a decline from 3.93 billion kroner a year earlier. If market conditions deteriorate further, the Copenhagen-based company may post a double-digit million-krone loss on operating level, it said. The company earlier forecast an operating profit of at least 250 million kroner.
“Although the profit warning is another disappointment from IC Companys, we still note the company’s history for being able to cut operating costs and again improve gross margins,” Nordea’ Weise said.
IC will “defend its market position” by holding activities that promote sales as the challenging market conditions will continue for the rest of the financial year, it said.
RNB Retail and Brands, based in Stockholm, declined 0.3 percent in the Swedish capital. H&M, which also is based in Stockholm, fell 0.1 percent.
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