Axo grows 28% in third quarter but drops its benefit due to IFRS 16

Grupo Axo, one of the largest retailers in Latin America, closed the third quarter in a duality. The company has concluded the period with a 28% increase in its sales thanks to the opening of new points of sale, while its net profit has plummeted 64%.

The company’s sales have reached 3.1 billion Mexican pesos (162.6 million dollars), compared to 2.4 billion Mexican pesos (127 million dollars) in the same period of the previous year. The income of the group was driven by “the incorporation of Tennix, the opening of boutiques and points of sale in department stores.”

Gross profit grew 26% due to the mix of products during the quarter and the opening of several stores during the year, to 1.5 billion Mexican pesos (79 million dollars). “Net income decreases mainly due to the interest of IFRS 16 (leases); without considering this, the company would present a 33% growth in net income,” said Grupo Axo. The company’s net profit in the period has been 17 million Mexican pesos (0.89 million dollars).

Axo represents brands like Abercrombie&Fitch, Calvin Klein, Guess or Tommy Hilfiger

In the first nine months, the group’s sales rose 32%, to 8.7 billion Mexican pesos (455 million dollars). Gross profit, on the other hand, increased by 26%, while net income fell by 124% (also due to the impact of IFRS), to losses of 22 million Mexican pesos (1.15 million dollars).

At the end of September 2019, Grupo Axo had 4,912 points of sale in department stores and 782 boutiques in Mexico and Chile. The company represents brands like Abercrombie&Fitch, Calvin Klein, Guess or Tommy Hilfiger.