Adler Modemärkte AG reported earnings results for the second quarter and first half ended June 2018. Preliminary figures show that the Company will be reporting EUR 17.9 million in EBITDA. That figure includes the non-recurring negative effect totaling EUR 0.8 million for consulting activities in the context of establishing the new ADLER 2020 corporate strategy and for the change in the logistics service provider coming up at the end of the year. In the same period of the previous year, this figure had amounted to EUR 16.6 million. The EUR 22.7 million actually reported in the previous year included non-recurring positive effects from the sale of real estate amounting to EUR 7.5 million and restructuring costs amounting to EUR 1.4 million. This means that ADLER has successfully bucked the continued negative earnings trend in the textile retail industry. For instance, quarterly revenue in the months of April through June amounted to EUR 140.4 million, down 3% year on year, compared to EUR145.3 million for the second quarter of 2017. During the quarter under review, the Company very significantly improved its free cash flow and balance sheet ratios. For instance, the free cash flow in the second quarter was up substantially on the prior year's figure of EUR 12.4 million. With respect to liquidity, ADLER reported a figure as at 30 June 2018 that was only insignificantly below the EUR 63.3 million at the end of 2017 and more than 40% above the EUR 40.7 million reported for the same period of the previous year.

ADLER thus reported cumulative consolidated revenue for the first half of 2018 amounting to EUR 243.1 million compared to EUR 254.0 million in the first half of 2017 and cumulative EBITDA of EUR 0.03 million compared to EUR 10.3 million for the first half of 2017. The gross profit margin, which very clearly reflects the operational improvements and efficiency enhancements achieved by the Company, rose from 52.9% to 54.3% in six months.

In light of this, the management confirms the outlook for the full year it issued in March 2018. According to that outlook, ADLER's Executive Board expects the industry environment to remain difficult in the textiles retail sector, and it expects full-year revenue to remain roughly at the same level as in the previous year (EUR 525.8 million). EBITDA is expected to exceed the adjusted 2017 figure (EUR 25.4 million) and amount to between EUR 26 million and EUR 29 million. This expectation is based on the anticipation that the scaled-up marketing measures due primarily to the wide range of activities connected with the ADLER Group's 70th anniversary will result in increased revenue in the second half of the year. As predicted, the ADLER 2020 Strategy and the already announced switch in the logistics service provider will begin to have a positive effect for the first time in financial year 2019.