Apart from its French e-commerce company Cdiscount.com, Dutch e-retailer Cnova N.V. had a challenging first quarter.
Cnova derives most of its online sales from consumers in Brazil and France and reported overall sales were down 16.9%. But sales at French e-retailer and online marketplace Cdiscount.com, which sells products ranging from apparel and appliances to furniture and wine, increased 15.3% in the first quarter of 2016.
Cnova, which went public in the U.S. in 2014, is a diversified e-commerce company that is part of Groupe Casino and No. 7 in the Internet Retailer 2015 Europe 500. Cnova also owns general merchandise site Extra.com.br in Brazil and is No. 2 in the Internet Retailer 2015 Latin America 500.
In December Cnova’s board announced it had hired outside legal and forensic consultants to assist with an internal review primarily in connection with alleged employee misconduct related to inventory management at its Brazilian distribution centers. During the review, the company says it also identified discrepancies related to accounts payable due to suppliers and accounts receivable/products in-transit with delivery companies. The internal review is still underway, the company says, rendering its 2016—and restated 2015—first quarter results preliminary.
For the first quarter ended March 31, Cnova reported:
- Total e-commerce sales of 741.6 million euros ($839.5 million), down 16.9% (6.6% in constant currency) from 893.0 million euros ($1.01 billion) in Q1 2015.
- Gross merchandise value, or the value of all merchandise sold on its marketplaces and e-retail sites, of 1.14 billion euros ($1.30 billion), down 6.6% (up 4.2% in constant currency) from 1.22 billion euros ($1.38 billion).
- Net loss of 65.8 million euros ($74.5 million), compared with a net loss of 48.5 million euros ($54.9 million) in the first quarter of 2015.
- Q1 website traffic grew by 16.6% year over year to more than 493 million visits, including a 12.1% increase at Cdiscount France and a 15.7% bump at Cnova Brazil.
- Share of traffic from mobile devices grew to 46.1% overall in the first quarter, including a 50.6% increase at Cdiscount France and 44.0% at Cnova Brazil.
- Cdiscount France had total online sales of 465.3 million euros ($526.8 million), up 15.3% from 403.5 million euros ($456.8 million) year over year.
- International web sales, from Cdiscount websites serving Colombia, Ivory Coast, Senegal and Cameroon, of 2.7 million euros ($3.1 million), down 3.6% from 2.8 million euros ($3.2 million).
- Cdiscount France’s gross merchandise value was 732.4 million ($829.2 million), up by 18.2% from 619.6 million euros ($701.5 million).
- Total sales for Cnova Brazil of 273.7 million euros ($309.9 million), down 43.8% (24.9% in constant currency) from 486.7 million euros ($551.0 million).
- Cnova Brazil’s gross merchandise value was 401.8 million euros ($454.9 million) a decline of 33.9% (down 10.5% in constant currency) from 599.2 million euros ($678.4 million).
Q1 highlights for Cdiscount.com included enhanced fulfillment services, expanded same-day delivery of large products (over 30 kilograms, about 66 pounds), reduced out-of-stock products to below 5% and added 10,000 SKUs, half in home furnishings, Cnova reported.
Cnova’s mobile traffic growth makes that channel a priority, CEO Emmanuel Grenier told analysts on the company’s first quarter earnings call, according to a transcript by SeekingAlpha.com. “We are improving our mobile site and app by moving these to a single platform,” Grenier said.
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