Marimekko - Determined scaling
Marimekko ended its year on a high note as Q4 figures were better than we expected for both sales and profitability. The outlook for 2025E remains similar to the prior year’s yet we expect some signs of improving demand in the domestic market during the year.
Profitability scaled well with sales growth in Q4
Marimekko’s net sales in Q4 were slightly higher than we estimated at EUR 54.0m (EUR 52.1/52.2m Evli/cons.). As expected, Finnish wholesale sales decreased (-11% y/y vs. -15% Evli est.) while especially domestic retail developed stronger than we had estimated (+8% y/y vs. 3% Evli est.). In addition, international sales grew slightly faster than we had expected (+13% y/y vs. +11% Evli est.). With the stronger than expected topline performance especially in the domestic market, the company’s operating leverage helped profitability as comparable EBIT climbed to EUR 9.3m equaling to 17.1% of net sales (Evli est. EUR 8.2m). The company’s BoD proposes a regular dividend of EUR 0.40 (Evli est. EUR 0.40) and an extraordinary dividend of EUR 0.25.
The guidance seems rather familiar
This year marks the third consecutive year where the company guides net sales increase and comparable EBIT margin to be approximately some 16-19%. Our previous estimates were in line with the guidance, yet we have made some revisions to our estimates. We now estimate net sales of EUR 190m (prev. EUR 193m) for 2025E with EBIT of EUR 34m (prev. EUR 34m) with margin of 17.8%. We expect that the company’s traditional acceleration towards H2 takes place slightly more noticeably this year. Especially the first quarter of this year seems rather weak compared to last year as Q1/24 included a large amount of non-recurring wholesale deliveries in Finland in addition to significant licensing income booking. While we expect now quieter Q1 and H1, we expect H2 to be boosted by the non-recurring promotional wholesale deliveries in Finland. Non-recurring promotional deliveries are anticipated to increase net sales in H2, although the number of deliveries is lower compared to last year. We model net sales growth of 10% for APAC and we expect licensing income to decline y/y in the region. Continued growth is supported by the increased brand sales and new store openings which will continue to focus on the region.
REDUCE (prev. ACCUMULATE) with a TP of EUR 14.0 (EUR 13.0)
We revise our target to EUR 14.0 (prev. EUR 13.0) and rating to REDUCE (prev. ACCUMULATE). We see the current pricing rather neutral on both relative and absolute terms as Marimekko is now priced at EV/EBIT of 17-15x for 2025-2026E.