Marimekko - Expecting a solid finish to the year

Wholesale drives volumes, licensing supports margins

Marimekko executed its strategy according to the plan during Q3 as the company’s growth was strong internationally driven by strong wholesale sales especially in APAC, NA and Scandinavia. With the higher volumes and improved gross margin, the company’s adj. EBIT came in at EUR 13.1m, above our estimate of EUR 12.6m. We have made only cosmetic changes to our estimates ahead of Q4/23 report. We estimate net sales of EUR 52.9m for Q4/23 (EUR 48.4m Q4/22). For Finland, we expect retail to continue to decline while wholesale volumes are supported by the non-recurring promotional deliveries. Our estimates are similar for other Western markets, although we also expect retail growth for North America and EMEA. For APAC, we expect continued growth driven by the loose franchise store openings. In terms of profitability, we estimate EBIT of EUR 9.0m (Q4/22 EUR 6.9m) with a margin of 17.1% (14.3%) driven by increased volumes, higher licensing sales and lower logistics costs.

Outlook of key interest as domestic market remains weak

In addition to Q4 figures, our interest lies on the outlook for 2024. For the Asian market, our main interest is on the number of new stores expected to be opened in 2024. The domestic market appears rather weak still as Finnish consumer confidence remained low during Q4 2023 as spending and intentions to make large purchases were low. In addition, data from domestic Christmas sales for fashion products was weak. On a positive note, consumer confidence improved slightly in January.

Pricing leans towards the higher end of the valuation range