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Travel retail's Hudson Group has reported very positive Q1 results

Hudson Group reports 9.2% Q1 turnover increase

Dufry subsidiary Hudson Group, the North American travel retailer, has reported a year-on-year increase of 9.2% in turnover (US$427m) for the first quarter of 2018.

Total Q1 net sales of US$415m produced organic sales growth (a combination of like-for-like sales growth and net new business and expansions) of 9.4% and a like-for-like sales growth of 5.5% (4.5% in constant currency).

Major factors in the sales result included an increase in average ticket size and the overall number of transactions, the company said.

Adjusted EBITDA of US$37m represented a year-on-year increase of 55.3%, or +20.7% assuming the reduced franchise fee rates the company currently pays Dufry had been in effect in the first quarter of 2017.

Q1 gross profit increased $24.7m or 10.2% to $268.0m compared to $243.3m in the year-ago period.

Selling expenses increased $6.2m or 6.5% to $100.9m in the first quarter as compared to the equivalent period in 2017, driven primarily by concession fees.

During Q1, Hudson Group successfully won, extended or expanded six concession contracts (including RFP wins at Phoenix Sky Harbor, Seattle-Tacoma and Billy Bishop Toronto City airports) and has signed an agreement with FAO Schwarz to serve as the exclusive airport retailer for FAO Schwarz and FAO Schweetz products and shops.

Joe DiDomizio, President and CEO of Hudson Group said: “Our impressive first quarter organic sales growth reinforces the attractive and resilient nature of the travel retail industry as well as the multiple levers we have to expand our concession portfolio.”

He added: “We made significant progress in executing our strategic initiatives, highlighted by the ongoing development of our ‘grab & go’ offerings as well as capturing additional white space opportunities through key wins at Phoenix and Seattle airports.

“As we look ahead, we are confident our performance year-to-date, combined with the continued execution of our strategic priorities, will position Hudson Group to deliver continued growth.”

Hudson Group currently operates over 1,000 travel retail stores, across 88 locations, in more than one million sq ft of retail space.

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