Maisons du Monde: Maisons du Monde saves furniture thanks to its share buyback program

(BFM Bourse) – Despite a significant deterioration in its half-year results, Maisons du Monde has just confirmed its full-year targets, which were revised downwards in May. In order to limit the impact of inflation on its margins, the group announces an “action plan” that aims to “contain costs and secure liquidity”. Notably, Maisons du Monde plans to launch a share buyback program that can reach up to 10% of its capital. Enough to reissue a title on the mat since May.

Maisons du Monde is set to boost its rolling stock price since lowering its 2022 forecasts in late May. The group said it is launching a new share buyback program that could reach “up to 10% of its capital” “the current share price does not reflect the intrinsic value of the company”. Prior to the announcement of this program, Maisons du Monde stock was trading at €9, having halved since the company’s profit warning last May.

Maisons du Monde presented this share buyback plan when it published its half-year results. The group, which is bearing the brunt of the economic downturn, saw profits fall by 59% to 8.4 million euros, compared to 20.5 million euros in the first half of 2021. The furniture specialist’s turnover does not look good with a fall of 4.8% 604 million euros in the past six months. For the second half of the year, the group expects the same development with “a drop in sales in the middle range between 1 and 10 percent”.

These results “reflect the difficult global environment” in which the specialty retailer operates, “characterized by low consumer confidence and high overall inflation,” explains Maisons du Monde. Developments in the second quarter can be explained in particular by “the sharp and sudden deterioration” in the “macroeconomic environment” following the start of Ukraine’s conflict with Russia, which has led to “inflation and a drop in consumer confidence across Europe,” it said in the statement.

An action plan to contain the costs

Despite weak demand, the group is determined to support the development of its sales through short and medium-term action plans, while taking care to protect its profitability through rigorous cost control. In the second half of the year, Maisons du Monde intends to freeze recruitment and restrict travel “to reduce the impact of rising inflation by 20 million euros”. The group hopes to bring their customers back to their stores by providing a “larger than usual promotional envelope to support sales”.

Investments in its key strategic initiatives, such as the opening of the second logistics center and continued use of the marketplace, will continue. Maisons du Monde also intends to continue replenishing its stocks to support future sales by managing supply shortages.

This action plan allows Maisons du Monde to confirm its annual targets, which had been revised downwards last May due to the deterioration in the economic situation and supply conditions.

For 2022, Maisons du Monde continues to expect an average decline in the single digits (“mid single digit negative” or around -5%). The EBIT margin is expected at 5% and the free cash flow level could remain between 10 and 30 million euros.

Sabrina Sadgui – ©2022 BFM Stock Exchange