Coats holds guidance as demand softens
By Frank Prenesti
Date: Wednesday 23 Nov 2022
(Sharecast News) - Industrial thread maker Coats reported a rise in revenues and held full-year guidance, despite strengthening forex headwinds, and said demand had softened in the second half.
The company on Wednesday said revenue grew 9% in the four months to October 31. Coats added that foreign exchange headwinds were greater than expected at the half year, with a 3-4% full year adjusted operating profit headwind increasing to 5% based on latest rates.
On an organic basis, sales grew 6% year-on-year, reflecting a strong prior year comparator and moderated compared to the first half due to an industry-wide softening in demand, mainly in apparel, towards the end of the period.
Apparel and footwear revenue increased 3% year-on-year in the period and 14% year-to-date. Apparel experienced some destocking by customers, as a result of the tougher macroeconomic environment, Coats said.
Footwear continued to see positive end market sentiment across the US, Europe and Asia. The acquisitions of Texon and Rhenoflex are performing in line with expectations.
Revenue in performance materials increased 15% with all segments continuing to perform well, Coats said.
"Our pricing actions and self-help efficiency programmes continue to offset the significant inflationary pressures in the supply chain. In addition, our strategic projects remain on-track, and are delivering significant operational and financial benefits."
Reporting by Frank Prenesti for Sharecast.com
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