SIGNA Sports United N.V.

Q2 fiscal 2023 net revenue was EUR195 million and H1 revenue was EUR441 million, down 23% and 2% year over year, respectively, on a reported basis. On a pro forma basis, H1 revenue was down 17% year over year. Active customers declined 15% to 6.1 million, visits fell 9% to 119 million, and net orders fell 3% to 3.5 million; net average order value rose 4%. Gross margin in H1 declined by 1,000 basis points to 26.4%. Reported adjusted EBITDA for H1 was negative EUR97 million, and adjusted EBITDA margin was negative 22%. Net cash from operating activities was negative EUR136 million, net cash from investing activities was negative EUR17 million, and the company ended H1 with EUR35 million of cash and cash equivalents. Pro forma liquidity stood at EUR273 million, including EUR88 million of undrawn convertible note capacity and an incremental EUR150 million commitment from a major shareholder. For FY2023, management expects revenue growth of negative 9% to negative 11% year over year and adjusted EBITDA margin of negative 16% to negative 18%. Longer term, it expects 12% to 15% top-line growth in the coming year, cash flow breakeven by FY2025, and cash generation by FY2026, with a target 7% to 10% adjusted EBITDA margin.

Stephan Zoll framed the quarter as being hit by a broad macro downturn, lower consumer demand, and heavy industry overstock, especially in bikes. He said the company has completed a strategic realignment focused on core markets, leaner operations, tighter inventory management, and realizing synergy benefits from Wiggle and US Tennis. His tone was cautious on the near term but more constructive on the back half, saying the business is seeing early signs of gross margin improvement and that the long-term megatrends in the category remain positive.

Alex Johnstone emphasized that financial results were pressured by lower demand, promotional activity, and a severe overstock environment that hurt margins. He cited H1 gross margin of 26.4%, down 1,000 basis points, H1 adjusted EBITDA of negative EUR97 million, and negative operating cash flow of EUR136 million; he also noted an approximately EUR20 million inventory write-off as the company reset stock levels. On liquidity, he said the company ended H1 with EUR35 million of cash and cash equivalents and has EUR273 million of pro forma liquidity, including EUR88 million of undrawn convertible capacity and EUR150 million of incremental shareholder support.

Analysts focused on how much confidence management has in demand recovery, especially as Q3 was nearly complete, and what the company is seeing in current trading. Stephan said core CPI inflation is easing in key markets, consumer confidence is improving from lows, and the company already sees a better gross margin trend as it clears old inventory and replenishes with demand items; he also said Q3 trading is in line with expectations and that year-over-year revenue declines should remain in the high-single digits, with improvement expected in Q4. Another question centered on why M&A still matters amid restructuring; Alex said the core priority is execution on the current plan, while buy-and-build remains the long-term strategy and the market dislocation also creates opportunity. On liquidity, management said the major shareholder commitment is intended to carry the company into FY2025 under a relatively conservative scenario, with ongoing dialogue dependent on business outlook.