Marimekko - Good start despite challenging conditions
Marimekko’s Q1 figures exceeded our estimates driven by the timing of non-recurring wholesale promotional deliveries and surprisingly resilient domestic retail sales.
Timing helped domestic wholesale, retail showed resilience
Driven by stronger than expected net sales development in Finland, Marimekko’s net sales grew by 7% to EUR 37.7m, (35.4/35.6m Evli/cons.) clearly surpassing our estimates. The estimate beat was driven by both the timing of non-recurring wholesale promotional deliveries in Finland and growth in domestic retail. On the international side, the rate of growth was in line with our estimates as APAC kept delivering strong growth. While APAC was stronger, smaller geographies, namely Scandinavia and EMEA, missed our net sales estimate. With strong volume development and improved gross margin due to increased licensing income and lower discounts, Marimekko’s comparable EBIT climbed to EUR 5.2m (3.3/3.5m Evli/cons.).
Earnings growth to pick up in 2025E
Marimekko kept its market outlook for Finland unchanged and expects that net sales will be approximately at the level of previous year. We have adjusted our estimates accordingly and now expect weaker sales for H2 driven by lower wholesale sales. For APAC, we increase estimate for net sales for 2024E slightly as Q1 came in stronger than we expected. We continue to estimate slight gross margin improvement for FY while we model higher OPEX when compared to last year driven by investments in growth and cost inflation. We now estimate revenue of EUR 181.6m and EBIT of EUR 33.4m for FY 2024. We continue to expect higher net sales (+8%) and EBIT (+12%) growth for 2025E as we model pick-up in domestic growth driven by expected improved market conditions and continued growth in APAC.
HOLD with a TP of EUR 13.0 (prev. EUR 12.0)
Marimekko trades at 22-19x P/E and 16-14x EV/EBIT on our 2024-2025E estimates. Valuation is starting to look slightly elevated as the company trades at a premium to our Premium and Luxury Goods peer groups (avg. for the aggregate). On the other hand, the company trades in line with its historic multiple levels and the current price presents a roughly 20% discount to fair value derived from our DCF.
Driven by stronger than expected net sales development in Finland, Marimekko’s net sales grew by 7% to EUR 37.7m, (35.4/35.6m Evli/cons.) clearly surpassing our estimates. The estimate beat was driven by both the timing of non-recurring wholesale promotional deliveries in Finland and growth in domestic retail. On the international side, the rate of growth was in line with our estimates as APAC kept delivering strong growth. While APAC was stronger, smaller geographies, namely Scandinavia and EMEA, missed our net sales estimate. With strong volume development and improved gross margin due to increased licensing income and lower discounts, Marimekko’s comparable EBIT climbed to EUR 5.2m (3.3/3.5m Evli/cons.).
Earnings growth to pick up in 2025E
Marimekko kept its market outlook for Finland unchanged and expects that net sales will be approximately at the level of previous year. We have adjusted our estimates accordingly and now expect weaker sales for H2 driven by lower wholesale sales. For APAC, we increase estimate for net sales for 2024E slightly as Q1 came in stronger than we expected. We continue to estimate slight gross margin improvement for FY while we model higher OPEX when compared to last year driven by investments in growth and cost inflation. We now estimate revenue of EUR 181.6m and EBIT of EUR 33.4m for FY 2024. We continue to expect higher net sales (+8%) and EBIT (+12%) growth for 2025E as we model pick-up in domestic growth driven by expected improved market conditions and continued growth in APAC.
HOLD with a TP of EUR 13.0 (prev. EUR 12.0)
Marimekko trades at 22-19x P/E and 16-14x EV/EBIT on our 2024-2025E estimates. Valuation is starting to look slightly elevated as the company trades at a premium to our Premium and Luxury Goods peer groups (avg. for the aggregate). On the other hand, the company trades in line with its historic multiple levels and the current price presents a roughly 20% discount to fair value derived from our DCF.