OVS Shares Rise After H1 Profit Beats Expectations on Strong Sales

Shares of OVS (MI:OVS) gained on Thursday after the Italian fashion retailer posted first-half adjusted net profit that significantly surpassed analyst expectations, supported by double-digit sales growth and improved margins.

The stock closed up 0.99% at €5.61 in Milan, outperforming the broader FTSE MIB index. Shares had risen as much as 4% earlier in the trading session following the release of the strong results.

First-Half Financials Beat Forecasts

For the first half of the year, OVS reported an adjusted net profit of €49.1 million, well above the Visible Alpha consensus estimate of €43.8 million. The company's top-line performance was also robust, with consolidated net sales increasing 10.7% to €877.4 million.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 12.3% to €114.3 million. OVS attributed the growth to higher like-for-like sales across its brands and a positive contribution from the recent integration of Goldenpoint, which has now moved into positive EBITDA territory.

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Favorable Outlook and Improved Balance Sheet

Company management expressed confidence for the remainder of the year. CEO Stefano Beraldo stated that expectations for the second half were "favorable," citing a good reception for the company's autumn collections.

Beraldo also noted that margins could benefit from the euro's appreciation against the U.S. dollar, adding that no significant negative impact is expected from other operating costs. Alongside the positive outlook, OVS confirmed its full-year cash-generation forecast.

The retailer also strengthened its balance sheet. Net financial debt fell to €240.1 million at the end of July, a significant reduction from €293.6 million recorded a year earlier.