Marimekko - Top performance
Marimekko delivered strong Q1 figures by showing double-digit growth in all its markets. Although the market environment includes uncertainties, Marimekko is trading with a quite moderate valuation. We upgrade our rating to BUY (HOLD) and adjust TP to EUR 14.5 (12.8).
Strong start for the year
Marimekko’s Q1 performance was clearly better than we had anticipated. Topline saw an increase of 24% y/y driven by all markets. A favorable trend of retail and wholesale sales in Finland and good development of int’l sales boosted the revenue to high double-digit growth. The largest segment, Marimekko’s home market Finland grew by 27% y/y while int’l sales increased by 20% y/y. Q1 group topline amounted to EUR 36.0m (Evli: 30.4m). Gross margin (63%) was negatively affected by increased logistics costs and higher discounts. Driven by softer gross margin and increased fixed costs, Q1 adj. EBIT margin (18.4%) was below that of the comparison period, adj. EBIT amounting to EUR 6.6m (Evli: 3.9m). EPS totaled EUR 0.12 (Evli: EUR 0.08).
Guidance intact, we made estimate revisions
Marimekko reiterated its 2022 guidance: revenue above the 2021 level and adj. EBIT margin between 17-20%. The company also expects the relative growth pace to slow down in H2, which stems from the strong comparison figures as well as lowered consumer confidence to which Marimekko was quite immune in Q1, in our understanding. We raised our 22E EBIT margin estimate near the upper bound of the guidance. Driven by a strong start of the year, we expect the company to face low double-digit growth in 2022 by full-year net sales amounting to EUR 167.7m and adj. EBIT totaling EUR 32.5m (more on report page 2).
BUY with a target price of EUR 14.5 (12.8)
The company’s share price has fallen from the 2021 highs by some ~50%. Meanwhile, Marimekko’s peers have also seen a decline in their valuation. Given the strong start of 2022 and by accepting a 22E EV/EBIT multiple of 18x, we upgrade our recommendation to BUY (HOLD) and adjust TP to EUR 14.5 (12.8).
Marimekko’s Q1 performance was clearly better than we had anticipated. Topline saw an increase of 24% y/y driven by all markets. A favorable trend of retail and wholesale sales in Finland and good development of int’l sales boosted the revenue to high double-digit growth. The largest segment, Marimekko’s home market Finland grew by 27% y/y while int’l sales increased by 20% y/y. Q1 group topline amounted to EUR 36.0m (Evli: 30.4m). Gross margin (63%) was negatively affected by increased logistics costs and higher discounts. Driven by softer gross margin and increased fixed costs, Q1 adj. EBIT margin (18.4%) was below that of the comparison period, adj. EBIT amounting to EUR 6.6m (Evli: 3.9m). EPS totaled EUR 0.12 (Evli: EUR 0.08).
Guidance intact, we made estimate revisions
Marimekko reiterated its 2022 guidance: revenue above the 2021 level and adj. EBIT margin between 17-20%. The company also expects the relative growth pace to slow down in H2, which stems from the strong comparison figures as well as lowered consumer confidence to which Marimekko was quite immune in Q1, in our understanding. We raised our 22E EBIT margin estimate near the upper bound of the guidance. Driven by a strong start of the year, we expect the company to face low double-digit growth in 2022 by full-year net sales amounting to EUR 167.7m and adj. EBIT totaling EUR 32.5m (more on report page 2).
BUY with a target price of EUR 14.5 (12.8)
The company’s share price has fallen from the 2021 highs by some ~50%. Meanwhile, Marimekko’s peers have also seen a decline in their valuation. Given the strong start of 2022 and by accepting a 22E EV/EBIT multiple of 18x, we upgrade our recommendation to BUY (HOLD) and adjust TP to EUR 14.5 (12.8).