February 23, 2018 / 6:44 PM / a month ago

UPDATE 1-Geox to keep up the pace in 2018 after return to profit growth

(Adds quotes, plans for stores, dividend and margin figures)

Feb 23 (Reuters) - Italian shoemaker Geox expects its profitability to continue to grow in 2018 under new CEO and former Gucci top executive Matteo Mascazzini, as it overhauls its product range and stores, the company said on Friday.

Geox will keep the number of directly operated stores “substantially” stable in 2018 and will refurbish them to boost performance, but it plans to cut stores managed by third parties, it said.

“Management will continue to implement plans to improve margin performance through specific measures targeting product, channel and price mix,” the company said in a statement, adding that it expects profitability to improve again in 2018.

Full-year adjusted earnings before interest, taxation, depreciation, and amortization (EBITDA) rose 40 percent in 2017 to 74.0 million euros, returning to growth following a drop in the previous year.

The maker of waterproof yet breathable shoes saw a rise in full-year adjusted EBITDA margin to 8.4 percent from 5.3 percent, in line with guidance in January.

Geox reported a decline in 2017 revenues of 1.8 percent at current currencies earlier this year, announcing at the same time that CEO Gregorio Borgo would leave.

The fall was expected as the company had cut its top line guidance back in November due to a retail business overhaul which was still putting a strain on sales.

The company’s board proposed an increase in the dividend to 0.06 euros per share for the year, three times as much as 2016.

“I am confident that these results (...) will soon allow us to achieve also a solid growth,” Geox Chairman and Founder Mario Moretti Polegato said. (Reporting by Silvia Recchimuzzi in Gdynia, editing by David Evans and Elaine Hardcastle)

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