INTERIM REPORT OF MARIMEKKO CORPORATION, 1 January–31 March 2025: Marimekko's net sales in the first quarter grew and operating profit was at a good level

Yahoo

14-05-2025

Marimekko Corporation, Interim Report, 14 May 2025 at 8.00 a.m. EEST
INTERIM REPORT OF MARIMEKKO CORPORATION, 1 January–31 March 2025: Marimekko's net sales in the first quarter grew and operating profit was at a good levelThis release is a summary of Marimekko's interim report for the January–March period of 2025. The complete report is attached to this release as a pdf file and it is also available on the company's website at company.marimekko.com under Releases & publications.The first quarter in brief
Marimekko's net sales increased by 5 percent and totaled EUR 39.6 million (37.7). Net sales were boosted in particular by the growth of wholesale sales in Europe and increased retail sales in Finland.
Net sales development was negatively impacted by timing-related factors: in the comparable year, a large amount of non-recurring promotional deliveries in Finnish wholesale sales occurred exceptionally in the first quarter, as well as a significant proportion of the licensing income for the year was recorded.
Net sales in Finland decreased by 3 percent as domestic non-recurring promotional deliveries were lower. International sales grew by 14 percent with both wholesale and retail sales developing well. As previously estimated, licensing income was considerably below the comparison period.
Operating profit was below the comparison period and amounted to EUR 4.3 million (5.1). Comparable operating profit in the seasonally smallest quarter totaled EUR 4.4 million (5.2) equaling to 11.1 percent of net sales (13.8).
Operating profit was decreased by weakened relative sales margin especially due to higher discounts but also significantly lower licensing income. In addition, fixed costs were higher than in the comparison period. On the other hand, increased sales supported operating profit.
Financial guidance for 2025The Marimekko Group's net sales for 2025 are expected to grow from the previous year (2024: EUR 182.6 million). Comparable operating profit margin is estimated to be approximately some 16–19 percent (2024: 17.5 percent). Rapid changes and uncertainties in the global trade policy, development of consumer confidence and purchasing power in the company's main markets as well as possible disruptions in global supply chains, among others, cause volatility to the outlook for 2025.
Uncertainties related to the development of net sales and result are described in more detail in the Major risks and factors of uncertainty section of the Interim Report.Key Figures
(EUR million)
1–3/2025
1–3/ 2024
Change,%
1–12/ 2024
Net sales
39.6
37.7
5
182.6
International sales
20.8
18.2
14
81.6
% of net sales
53
48
45
EBITDA
6.7
7.4
-10
40.7
Comparable EBITDA
6.8
7.5
-10
41.3
Operating profit
4.3
5.1
-16
31.4
Operating profit margin, %
10.8
13.4
17.2
Comparable operating profit
4.4
5.2
-15
31.9
Comparable operating profit margin, %
11.1
13.8
17.5
Result for the period
3.3
3.9
-16
24.4
Earnings per share, EUR
0.08
0.10
-16
0.60
Comparable earnings per share, EUR
0.08
0.10
-16
0.61
Cash flow from operating activities
-3.2
-0.7
29.1
Gross investments
0.9
0.5
86
2.3
Return on capital employed (ROCE), %
29.9
34.1
31.4
Equity ratio, %
61.5
58.4
58.7
Gearing, %
-5.6
-1.8
-12.9
Net debt / EBITDA (rolling 12 months)
-0.11
-0.03
-0.24
Personnel at the end of the period
477
446
7
480
outside Finland
86
78
10
84
Brand sales*
102.7
99.7
3
419.2
outside Finland
75.5
73.7
2
287.1
proportion of international sales, %
74
74
68
Number of stores
170
162
5
168
* Brand sales are given as an alternative non-IFRS key figure, representing the reach of the Marimekko brand through different distribution channels. An unofficial estimate of sales of Marimekko products at consumer prices, brand sales are calculated by adding together the company's own retail net sales and the estimated retail value of Marimekko products sold by other retailers. The estimated retail value is based on the company's realized wholesale sales and licensing income. Brand sales do not include VAT, and the key figure is not audited. Some licensees provide exact retail figures, in which case these figures are used in reporting brand sales. For other licensing agreements, Marimekko's own retail coefficients for different markets are used. Licensing income is reported as brand sales when licensed products are sold. The change percentages in the table were calculated on exact figures before the amounts were rounded to millions of euros. The figure for comparable earnings per share takes account of similar items as comparable operating profit; tax effect included. Reconciliation of alternative key figures to IFRS and management's discretion regarding items affecting comparability are presented in the table section of the Interim Report.Tiina Alahuhta-Kasko, President and CEO, in conjunction with the report:"Marimekko's net sales continued to grow profitably in the first quarter. The increase in retail sales in all market areas in the prolonged challenging market situation reflects the competitiveness of the Marimekko brand and our agility.Marimekko's net sales grew by five percent in the first quarter and reached EUR 39.6 million (37.7). Net sales were boosted in particular by the growth of wholesale sales in Europe and increased retail sales in Finland. Our retail sales also developed well in all of our other markets, and wholesale sales increased in all of our international market areas. The development of net sales was negatively affected by timing-related factors: in the comparable year, a large amount of non-recurring promotional deliveries in Finnish wholesale sales occurred exceptionally in the first quarter, as well as a significant proportion of the licensing income for the year.In the important domestic market, Finland, retail sales grew by nine percent. Total net sales in Finland decreased by three percent due to a decline in non-recurring promotional deliveries in domestic wholesale sales. International net sales increased by 14 percent in spite of licensing income being significantly below the comparison period, as previously estimated.Our comparable operating profit in the January–March period was at a good level, in the seasonally smallest quarter, reaching EUR 4.4 million (5.2) and representing 11.1 percent of net sales (13.8). Operating profit was negatively affected by the weakening of the relative sales margin, which was particularly due to higher discounts but also attributable to a considerable decrease in licensing income. Fixed costs were also higher than in the comparison period. The growth of net sales supported operating profit.We continue our consistent efforts to scale up the Marimekko phenomenon internationally. This year, we will focus on deepening Marimekko's story and showcasing the richness of our design language, building on the broad attention we gained last year as we celebrated the 60th anniversary of the Unikko print. At Copenhagen Fashion Week in January, Marimekko's fashion show explored the relationship between art, architecture and fashion, delivering a combination of surprising colors and patterns that fashion lovers have learned to expect from us. In March, we opened the Field of Flowers exhibition in Osaka, featuring new floral prints by five designers. The exhibition and the related pop-up stores will tour across Asia throughout the year, showcasing Marimekko's latest print designs — classics of the future — and provide an opportunity to reinforce our relationship with friends of our brand as well as introduce Marimekko to new customers, especially in Asia, which is the most important geographical area for our international growth.Marimekko Artist Series capsule collections are another natural way for us to bring art into everyday life in a manner that honors Marimekko's traditions and strengthens our thought leadership in the art of printmaking. Ready-to-wear and home décor products adorned by abstract floral patterns designed for Marimekko by the Swedish-born, London-based artist Petra Börner hit the market in March and were very enthusiastically received. After the review period, our lifestyle assortment was complemented by a limited-edition collaboration collection with the global footwear brand Crocs, as cheerfully colored sandals and clogs as well as accessories arrived in stores in April. These kinds of brand collaborations help us further grow our brand awareness around the world, thereby supporting our SCALE strategy. The desirability of the Marimekko brand is also demonstrated by the continued positive trend of our retail sales in all market areas in the first quarter. We constantly develop our omnichannel retail network, as it is essential for us to be in good locations that cater to our target audience. During the first quarter, we opened four Marimekko stores and three pop-up stores in different parts of the world. In Canada, we entered into a loose franchise partnership, a model familiar to us in Asia, in order to further develop our omnichannel business in the country. Consequently, a Marimekko online store, corresponding to our latest concept, was launched in the Canadian market in March. I want to take this opportunity to extend my warmest thanks to our customers, our personnel and our partners around the world for the strong start of the year in a challenging market situation. We believe that Marimekko's optimistic and joyful message is particularly meaningful now that daily life may feel uncertain in many respects. Our strong financial position and scalable, low-risk and low-capital requiring business model provide us with the means to continue our success story also this year. The tensions in global trade policy and increases in tariffs, for example, create significant uncertainty in the business environment. At Marimekko, we work actively in various ways to mitigate the negative impacts on sales or profitability.In the exceptional circumstances seen over the past years, we have found new ways of working and learned to quickly react to changing conditions in an agile manner. Our appealing and wide-ranging lifestyle assortment, consisting of three product lines, our loyal and constantly growing customer base, and our geographically diversified business and value chain bring stability in different economic conditions."Market outlook and growth targets for 2025The uncertainties related to the development of the global economy, such as tensions related to geopolitics and trade relations, have increased. The indirect impacts of these tensions and other uncertainties, as well increasing tariffs, on the general economic situation may be reflected in consumer confidence, purchasing power and behavior and, as a result, can have a weakening impact on Marimekko's business in 2025. Possible disruptions in production and logistics chains may also have a negative impact on the company's sales, profitability and cash flow.Finland, Marimekko's important domestic market, traditionally represents about half of the company's net sales. Sales in Finland in 2025 are impacted by the weak general economy and low consumer confidence as well as the development of purchasing power and behavior. In addition, the tactical operating environment continues to have an impact on the business. The timing between quarters of the non-recurring promotional deliveries in Finnish wholesale sales and their size typically vary on an annual basis. In 2025, the non-recurring promotional deliveries in wholesale sales are expected to be significantly lower than in the comparable year and weighted clearly in the second half of the year. Despite the weak market situation, net sales in Finland are expected to be approximately at the level of the previous year or increase slightly.International sales are estimated to grow in 2025. In the strategy period 2023–2027, Marimekko focuses on Asia as the most important geographical area for international growth. In 2025, net sales in the Asia-Pacific region, Marimekko's second-largest market, are expected to increase. All brick-and-mortar Marimekko stores and most online stores in Asia are partner-owned. In 2025, the aim is to open approximately 10–15 new Marimekko stores and shop-in-shops, and most of the planned openings will be in Asia.Licensing income in 2025 is forecasted to be significantly below the previous year's record level.Due to the seasonal nature of Marimekko's business, a major portion of the company's euro-denominated net sales and operating result are traditionally generated during the second half of the year. Net sales and operating profit development in the first quarter of 2025 was negatively impacted by timing differences from the comparison period. In the comparable year, a large amount of non-recurring promotional deliveries in Finnish wholesale sales occurred exceptionally during the first quarter of the year. In addition, a significant part of licensing income in 2024 was recorded already during the first quarter of the year, unlike in 2025.Marimekko develops its business with a long-term view and aims to continue scaling its profitable growth in the upcoming years. In 2025, fixed costs are expected to be up on the previous year. The general cost inflation continues to also affect Marimekko in 2025. Personnel expenses are impacted, for example, by general pay increases in different markets. Marketing expenses are expected to increase (2024: EUR 10.6 million).Increasing tariffs in the United States have a direct impact on only a small part of Marimekko's business, as the entire North American market accounted for 6 percent of the Group's net sales in 2024. Based on current information, the increases in tariffs are expected to increase the procurement costs of Marimekko products sold in the US market, but the company has initiated diverse measures to mitigate the negative impacts of the tariffs.Early commitments to product orders from partner suppliers, typical of the industry and partly further emphasized due to different factors, undermine the company's ability to optimize product orders and respond to rapid changes in demand and supply environment, which also increases risks related to sales, relative profitability, inventory management and cash flow. This also hampers responding to the increasing tariffs in the US. There are also uncertainties related to global production and logistic chains, which may cause delays, for example, and thus have an impact on the company's sales and profitability. Marimekko works actively in various ways to ensure functioning production and logistics chains, to mitigate increased costs and other negative impacts, to avoid delays, and to enhance inventory management.Marimekko is closely monitoring the development of global trade policy and tariffs between countries, general economic situation, the development of consumer confidence and purchasing power and the impacts of possible exceptional situations and disruptions, and adjusts its operations and plans accordingly.Media and investor conferenceA conference for media and institutional investors will be held in English on 14 May 2025 at 2.00 p.m. EEST. A live webcast of the conference can be followed at https://marimekko.videosync.fi/q1-2025, and a recording of the webcast will be available at the same address later. Questions can be asked during the live webcast in writing.Further information:Tiina Alahuhta-Kasko, President and CEO, tel. [phone]Elina Anckar, CFO, tel. [phone]MARIMEKKO CORPORATION Corporate Communications Anna Tuominen Tel. +358 40 [e-mail]: Nasdaq Helsinki Ltd Key mediaMarimekko is a Finnish lifestyle design company renowned for its original prints and colors. The company's product portfolio includes high-quality clothing, bags and accessories as well as home décor items ranging from textiles to tableware. When Marimekko was founded in 1951, its unparalleled printed fabrics gave it a strong and unique identity. In 2024, the company's net sales totaled EUR 183 million and comparable operating profit margin was 17.5 percent. Globally, there are roughly 170 Marimekko stores, and online store serves customers in 39 countries. The key markets are Northern Europe, the Asia-Pacific region and North America. The Group employs about 480 people. The company's share is quoted on Nasdaq Helsinki Ltd. www.marimekko.com
Attachment
Marimekko_Interim_Report_Q1_2025