U.S. contributes to tough year for WeSC

WeSC reported Wednesday that its sales and profits declined for the year ended in April, but vowed to return to profitability in the next fiscal year.

However, forward orders for this fall are soft, down 6% in local currencies, the company said.

WeSC further clarified Thursday in a new press release that winter forward orders are looking more positive, up 6.1% in local currencies vs. the same period last year.

For fall and winter combined, forward orders are down 4% in local currencies.

2011/2012 Fiscal Year

The streetwear company based in Sweden said sales fell 8% to SEK 375.5 million ($53.4 million). Sales in local currencies, which excludes the impact of foreign currency swings, declined 4%.

WeSC reported an operating loss of SEK 24.7 million ($3.5 million) vs. an operating profit of SEK 41.8 million ($5.9 million) in the previous fiscal year. Operating income was impacted negatively by a SEK 5 million ($710,000) provision for bad debts and for SEK 15 million ($2.1 million) in restructuring costs and losses in the U.S.

The company reported an after tax loss of SEK 23.4 million ($3.3 million) vs. profit after tax of SEK 29.4 million ($4.2 million) last year.

Q4

For the quarter ended in April, sales fell 2.3% to SEK 84.5 million ($12 million). Sales in local currencies declined 1%.

The company reported an operating loss of SEK 22 million ($3.1 million) vs. an operating profit of SEK 1.3 million ($184,852) in the same period last year.

WeSC’s loss after tax was SEK 19.2 million ($2.7 million) vs. a profit after tax of SEK 0.3 million ($42,654).

Forecast

The company said for the 2012/13 fiscal year, sales should grow, excluding in the U.S. where it recently signed an agreement to switch from a direct operation to a licensed one.

That move should improve the overall profitability of the company, WeSC said in its earnings press release.