Duty-free retailer Avolta posts Q1 results in line, sees near-term headwinds from Iran war
Q1 Financial Performance and Market Outlook
By Ozan Ergenay
May 7 (Reuters) - Swiss duty-free retailer Avolta reported quarterly results in line with estimates on Thursday, despite the conflict in the Middle East.
Company Resilience Amid Geopolitical Uncertainties
The company said the results have been supported by its strong execution, global footprint and the ability to adjust costs, allowing the Swiss firm to protect its profitability and cash flow amid geopolitical uncertainties.
Impact of Middle East Conflict
Avolta, which runs shops at airports, on cruise liners, in seaports, and other tourist locations worldwide, said the Middle East conflict continues to represent the primary headwind for its markets.
Stock Market Reaction
Shares in the company rose 3.3% as of 1050 GMT, and were among the best performers of Switzerland's mid-cap index, which was down 0.4%.
Analyst Insights and Growth Prospects
Analyst Commentary
"Avolta delivered a solid set of Q1 numbers in a challenging environment and current trading in North America is encouraging and underpins some resilience, partly offsetting weak travel activity in the Middle East," Manuel Lang, an analyst from Vontobel, said.
"Organic growth of 3% since the escalation of the conflict should help alleviate concerns around a broader global travel slowdown, although consumer spending remains fragile amid rising jet fuel prices," he said.
Financial Highlights
Core Turnover
Avolta's core turnover stood at 2.90 billion Swiss francs ($3.72 billion) for the first quarter, down from 3.05 billion a year earlier.
However, the figure met market expectations.
Consensus and Forecasts
Analysts at Jefferies said in a note to clients that Avolta's results were in line with the consensus estimate of 2.92 billion Swiss francs.
The company maintained its medium-term forecasts, aiming for 5%-7% organic growth and a gradual rise in core profit margins by 20-40 basis points a year.
Additional Information
($1 = 0.7787 Swiss francs)
(Reporting by Ozan Ergenay in Gdansk; Editing by Mrigank Dhaniwala)
