SMCP lowers annual guidance amid Europe and China slowdown

Luxury conglomerate SMCP has adjusted its 2023 annual guidance, lowering its forecasted sales growth from mid- to high- single digit to mid-single digit.

Additionally, the group reported an adjusted EBIT margin, now expected to be in between 7 and 9 percent instead of its previously forecast 9.2 percent.

The company, which owns the likes of Sandro, Maje and Claudie Pierlot, attributed the decline to the overall deterioration of market conditions, with a “persistently inflationary environment” causing a slowdown of growth in Europe.

France, for example, had recorded “sluggish consumption” since the beginning of August, while other countries like Switzerland and Italy have also continued to present similar reports.

SMCP added that Chinese consumption had also not “followed the expected trajectory”, leading it to now target a moderate growth in sales for the second half of the year compared to 2022.

The group said it would be implementing an “action plan” centred around continuing its full price strategy, prioritising investments, making qualitative expansions of its physical and digital network and improving store team productivity, as well as adjusting the recruitment policy of its head office teams.

Through this action plan, and among other things, SMCP noted that it was “confident of its resilience”, adding in a release that it would continue to seize growth opportunities in the coming months and years.