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Same-store-sales growth was a solid 5% in H2; an additional acceleration was noticed in the first weeks of this year, i.e. about 6%.
During the last reporting period, sales growth was 8% and operating income was 5% higher. The margin deterioration is mainly due to lacking FX hedging developments. Yet, due to its importing sourcing facilities in Europe and in Spain in particular, the company has a high cost exposure in EURO. Ongoing, with the FX risks now better managed, the euro-weakness should provide the company a positive balance sheet impact.
The just-in-time production concept provides the company some leeway and some competitive advantage. However at present price levels, the stock is no longer cheap and carries more or less the same premium as other euro-zone stocks. Medium term, the company has an excellent upside potential as in its core markets (Europe), consumer confidence should return with QE being rolled-out.
Knowledge is power.
