In a period of very high inflation, the time is really not for consumerism at all costs. Far from it… Evidenced by the latest figures from the Banque de France, relayed on Monday by the analyst firm TP-Icap Midcap. The month of July was once again very bad, with a 24% drop in furniture sales over one year in volume, but 18% in value, which reflects the price increase policy pursued by retailers. A trend that can also be seen in the comparison with the figures for July 2019, marked by a decline of 8.6% in volume but an increase of 2.2% in value.
At the Paris Stock Exchange, the players concerned are struggling to raise their heads. On Monday, the home improvement and interior decoration group Maisons du Monde fell again by more than 3%, which brings the share price drop to almost 50% since the start of the year. . In the sector, the online furniture seller Miliboo has dropped 37% since December 31. Roche Bobois is doing much better, with a decline limited to 6% over the period – this is even less than the 10% drop in the Cac 40 –, this excellent resistance of the brand being explained by its high positioning of range.
The base effect will be less difficult in August and September, nevertheless estimates the research office, which therefore maintains, in the current state of things, its forecast of a decline of just over 5% in sales of Houses world in the third quarter. TP-Icap Midcap is still buying the stock, with a target price of 17.40 euros, ie a significant potential of 68%, over a medium-term horizon. While stating that ” only a good fourth quarter would be a catalyst for the title “.
Control margin erosion
The furniture and home decoration brand derives just over half of its turnover from France, but it is also present in Italy, Spain, Belgium and Germany. In the first half, for sales down 4.8%, to 603.9 million euros, operating profit fell by more than 40%, to 28.4 million euros and net profit by nearly 60%, to 8.4 million. For the rest of the year, the company indicated, during this publication of mid-term accounts, that it wanted to best balance its equation between protecting profitability and cash flow and fueling sustainable growth. »
In this context, the management of Maisons du Monde intended to boost its sales while controlling the erosion of the gross margin ” in a highly inflationary environment », gaining productivity in logistics and transport, minimizing all discretionary expenses in order to compensate for certain increases in fixed costs (salaries, energy), rationalizing investment expenses given the low visibility on market conditions, finally optimize the working capital requirement, in a context of inventory rebuilding.