In a period of very high inflation, this is really not the time for consumerism at any cost. Far from it… Witness the latest Banque de France figures, which were reported on Monday by the analytical company TP-Icap Midcap. July was again very poor, with furniture sales down 24% in volume over the year, but down 18% in value, reflecting retailers’ policy of increasing prices. A trend that can also be seen compared to July 2019 figures, marked by an 8.6% decrease in volume but a 2.2% increase in value.
On the Paris Stock Exchange, the players in question are struggling to keep their heads up. Home improvement and interior design group Maisons du Monde fell again by more than 3% on Monday, sending its share price down almost 50% since the start of the year. In the sector, online furniture retailer Miliboo has fallen 37% since 31 December. Roche Bobois is doing much better, with a decline limited to 6% over the period – that’s even less than the 10% decline in the Cac 40 – and this excellent resistance of the brand is explained by its high positioning of the range.
The underlying effect will be less severe in August and September, however, estimates the research office, which therefore maintains, as things stand, its forecast of a drop of just over 5% in Houses world sales in the third quarter. TP-Icap Midcap continues to buy shares, with a target price of EUR 17.40, i.e. a significant potential of 68% in the medium term horizon. Stating that ” only a good fourth quarter would be the catalyst for the title “.
Control edge erosion
The furniture and home decoration brand generates slightly more than half of its turnover from France, but is also present in Italy, Spain, Belgium and Germany. In the first half of the year, with sales falling by 4.8%, to EUR 603.9 million, operating profit fell by more than 40%, to EUR 28.4 million, and net profit by almost 60%, to EUR 8.4 million . For the rest of the year, the company indicated, during this announcement of the medium-term financial statements, that it wants to best balance its equation between protecting profitability and cash flow and fostering sustainable growth. »
In this context, the management of Maisons du Monde intended to increase its sales while controlling the decline in gross margin ” in a highly inflationary environment », increasing productivity in logistics and transport, minimizing all discretionary costs to compensate for certain increases in fixed costs (wages, energy), rationalizing investment costs given the low visibility of market conditions, finally optimizing working capital requirements, in the context of renovation inventory.