Wolford confirmed at HOLD, TP EUR 12.00 - Awaiting top line recovery as Asian strategy takes shape

Following the release of FY 18/19 results on July 23 we update our operational forecasts for Wolford. We confirm our 12-month target price of EUR 12.00 and reiterate our HOLD recommendation at current share price levels. Wolford suffered its fourth consecutive year of operating losses, as expected. While we consider the top line development throughout FY 18/19 disappointing, we highlight that 4Q 18/19 recorded the mildest decline of the four quarters of the year (by 2.1% yoy). We also acknowledge the efforts on the cost-cutting side, which enabled the company to decrease staff costs by EUR 8.6 mn in FY 18/19 (and EUR4.0 mn in 4Q 18/19). 

In February, Wolford launched a market offensive in China in partnership with Fosun Fashion Brand Management Company (FFBM), a subsidiary of Fosun Fashion Group. The jury is out on whether Wolford will be able to benefit from the appetite for premium brands among China's burgeoning population to the extent that is targeted. 

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