Australian-born skate and apparel business Globe International has witnessed a 23 per cent jump in its share price this week following its latest trading update that showed a profitable surge despite a double-digit dive in revenue for FY24.
Globe International manages several brands, including its namesake brand Globe and its own labels FXD workwear and Impala roller skates, as well as acquired businesses such as Salty Crew and It’s Now Cool.
Net sales for the group company were down by 12 per cent to $222.3 million. Despite the fall, its operating profit (EBIT) was up 12.4 per cent to $17.1 million, with net profit up 10 per cent to $11.5 million.
International markets contributed $8.1 million of EBIT, making up 32 per cent of total EBIT, and follows an operating profit loss of $5.7 million in FY23.
According to Globe, the $17.1 million EBIT reported for the year generated a margin of 7.7 per cent on net sales, which compares to 2 per cent in the previous year.
“This increase in profitability is attributed to a reduction in hardgoods clearance sales and a lower operational cost base,” the company reported. “In FY23, the operational cost base was reset by removing underperforming brands and their associated costs, as well as restructuring Globe’s European division.
“These initiatives, in conjunction with operational efficiencies, helped to improve the quality of earnings in FY24, putting Globe on a strong footing as it enters FY25.”
Australasia was the most profitable region, driven by increasing demand for FXD workwear, streetwear apparel and emerging brands. Globe also reported that its North America division experienced a return to profit after a difficult 2023 due to a downturn in the hardgoods cycle and excess inventory. Growth in apparel brands Salty Crew and FXD drove performance.
Globe International CEO Matt Hill confirmed the group’s core brands - Globe, FXD, Impala Skate and Salty Crew – were all profitable.
“Meanwhile, emerging brand ‘It’s Now Cool’ successfully demonstrated strong potential for future growth,” Hill said.
“While it’s premature to provide reliable sales outlooks, we expect FY25 sales to remain relatively flat, but profitability to increase through sustained brand leadership and the strategic initiatives of FY23 continuing to positively flow through.”
Commenting on the outlook of Globe, Hill said that while skate remains its heritage and culture, the business continues to evolve its brand mix by creating subsidiaries that operate in the board sports, streetwear, workwear and outdoor distribution segments around the world.
“I am proud of the significant progress the group made over FY24 that led to increased profitability and a return to significant dividend payout for our shareholders,” he said.
“Looking to FY25, we will continue to focus on growing our market-leading brands, investing in core and emerging brands, and driving profitability to deliver value for our shareholders.”