Switzerland-based global travel retailer Avolta, formerly known as Dufry, experienced strong sales in the first quarter, with its two biggest regions, Europe, Middle East, and Africa (EMEA) and North America, driving revenue growth. North America broke $1 billion in revenue, reaching $1.07 billion or 974 billion Swiss francs. Despite this positive performance, investors were not impressed, leading to a 2% decline in the stock price on Thursday and Friday. However, year-to-date, the share price has risen by 13.4%.
The outlook for air travel for the full year is optimistic, with expectations that it will surpass 2019 levels by up to 4%, according to the International Civil Aviation Organization (ICAO). Organic growth of 7.3% in North America was attributed to robust growth in both travel retail and food and beverage (F&B), as well as strong demand for the duty-free segment. Avolta saw growth in North America due to expanded operations, including new stores and brands in airports across the region.
In the EMEA region, Avolta saw organic growth of 11.7%, driven by strong leisure demand for vacation destinations in southern Europe such as Italy, Greece, and Morocco. The retailer also secured several wins and extensions in EMEA in Q1, including contracts for F&B stores at various airports. EMEA and North America accounted for 80.6% of Avolta’s revenue in Q1, up from 77.4% in the same quarter last year.
Overall, Avolta reported 8.6% year-on-year organic growth in the first quarter, reaching 2.8 billion Swiss francs ($3.1 billion). CEO Xavier Rossinyol expressed confidence in the company’s outlook for 2024 and beyond, citing promising market conditions and the execution of their Destination 2027 strategy. Avolta, with over 5,100 points of sale across 73 countries, is well-positioned to take advantage of the rebound in travel.
Moody’s upgraded Avolta’s credit rating from Ba3 to Ba2 with a stable outlook in March, while S&P shifted its ratings from BB to BB+, also with a stable outlook. Rossinyol highlighted the agencies’ recognition of Avolta’s strong business model and successful deleveraging efforts in recent months. The company’s ability to adapt to changing travel trends and its global presence make it a key player in the travel retail industry moving forward.
