Marimekko - Profitability below estimates
Marimekko's third quarter revenue was in line with our estimates, yet profitability fell a tad short due to higher-than-expected fixed costs. Main driver behind the higher fixed costs were planned marketing investments.
- Group result: net sales fell slightly short of tough comparison period at EUR 47.2m (EUR 47.0/47.9m Evli/cons.). As expected, Finnish wholesale sales decreased notably due to the timing effect of non-recurring promotional deliveries. International sales grew in line with our estimates.
- Adj. EBIT amounted to EUR 11.1m (EUR 12.0/12.4m Evli/cons.), reflecting a margin of 23.5%. Profitability was lower than expected. Profitability was affected by higher fixed costs due to planned investments in the brand marketing of the 60th anniversary of the Unikko print and increased personnel expenses, among other factors. EPS came in at EUR 0.21 (EUR 0.23/0.23 Evli/cons.).
- Finland: topline fell 9% to EUR 25.7m (Evli est. EUR 25.6m). The wholesale sales decreased slightly more than we estimated (-33% y/y vs. Evli est. -30%) while retail sales grew at faster pace than expected (8% y/y vs. Evli est. 5%).
- Int’l: Marimekko’s international sales grew 9% y/y, in line with our estimates. APAC growth missed our estimates slightly as the important market area grew 9% y/y (Evli est. 11.8%). On the other hand, net sales grew 23% y/y in Scandinavia.
- Marimekko continues to expect that the sales in Finland will be roughly at the level of last year in 2024 and international sales are estimated to grow in 2024.
- Financial guidance unchanged: net sales expected to grow from the previous year, comparable EBIT margin to be 16-19%.