Marimekko - Flat sales expected for Q1
Marimekko reports its Q1/24 figures 15th of May. We expect flat sales year-on-year and slightly lower EBIT as we model higher OPEX driven by increased fixed costs and overall cost inflation.
Domestic market remains challenging for 2024E …
Marimekko continues to face challenging market conditions in the domestic market as the Finnish consumer confidence has stayed at a relatively low level. Consumer spending in Finland is estimated to grow in 2024E yet the growth is still largely led by spending on services. Based on estimates by ETLA Economic Research, the consumer spending for categories important for Marimekko, semi-durable and durable goods, is expected to stay level on real terms (durable goods) and to grow by 0.2% y/y (semi-durable goods). While the spending on semi and durable goods is expected to be flattish in 2024E, the spending is estimated to increase more rapidly in 2025E with 1.6% y/y real growth on semi-durable goods and 3.2% on durable goods.
… therefore, growth relies on international markets
We continue to estimate growth from APAC for the entire FY 2024. In addition to projected growth from new openings, we expect continued like-for-like growth for Marimekko’s store fleet. In addition to APAC, we expect growth also in the other international markets for FY. In Finland, we expect sales decline for H1 while for the whole year, we expect flattish sales development. For the first quarter, we estimate net sales to be roughly in line with Q1/23. In terms of profitability, we expect the gross margin to have stayed roughly at the level of last year during the first quarter. We expect higher OPEX for Q1 driven by increased fixed costs and general cost inflation. We maintain our Q1 forecasts at EUR 35.4m in net sales and EUR 3.3m in EBIT.
HOLD with a TP of EUR 12.0 (EUR 11.5)
While our estimates remain unchanged for 2024E, we adjust TP back to EUR 12.0 (prev. EUR 11.5) driven by higher multiples for the Luxury goods peer group and slight positive estimate adjustments for 2025E and beyond. Our TP values Marimekko at 14-12x 2024-2025E EV/EBIT, in line with the median EV/EBIT for the Premium and Luxury Goods peer groups combined.
Marimekko continues to face challenging market conditions in the domestic market as the Finnish consumer confidence has stayed at a relatively low level. Consumer spending in Finland is estimated to grow in 2024E yet the growth is still largely led by spending on services. Based on estimates by ETLA Economic Research, the consumer spending for categories important for Marimekko, semi-durable and durable goods, is expected to stay level on real terms (durable goods) and to grow by 0.2% y/y (semi-durable goods). While the spending on semi and durable goods is expected to be flattish in 2024E, the spending is estimated to increase more rapidly in 2025E with 1.6% y/y real growth on semi-durable goods and 3.2% on durable goods.
… therefore, growth relies on international markets
We continue to estimate growth from APAC for the entire FY 2024. In addition to projected growth from new openings, we expect continued like-for-like growth for Marimekko’s store fleet. In addition to APAC, we expect growth also in the other international markets for FY. In Finland, we expect sales decline for H1 while for the whole year, we expect flattish sales development. For the first quarter, we estimate net sales to be roughly in line with Q1/23. In terms of profitability, we expect the gross margin to have stayed roughly at the level of last year during the first quarter. We expect higher OPEX for Q1 driven by increased fixed costs and general cost inflation. We maintain our Q1 forecasts at EUR 35.4m in net sales and EUR 3.3m in EBIT.
HOLD with a TP of EUR 12.0 (EUR 11.5)
While our estimates remain unchanged for 2024E, we adjust TP back to EUR 12.0 (prev. EUR 11.5) driven by higher multiples for the Luxury goods peer group and slight positive estimate adjustments for 2025E and beyond. Our TP values Marimekko at 14-12x 2024-2025E EV/EBIT, in line with the median EV/EBIT for the Premium and Luxury Goods peer groups combined.