Marimekko - Expecting strong development
Marimekko is set to report Q3 figures on Friday, October 31. We expect sales growth to accelerate from H1, driven by APAC and domestic wholesale. Stronger sales should also support earnings.
Some rebound in consumer confidence from H1
Marimekko delivered around 3% revenue growth in H1, reaching EUR 84.1m, driven primarily by strong wholesale gains in Europe and retail sales in Finland. The APAC region, a strategic growth focus, saw more subdued momentum. Despite overall topline growth, H1 reported EBIT declined by roughly 5% due to higher discounting, lower licensing income, and increased fixed costs from digital investments and personnel expansion. Ahead of Q3, consumer confidence has improved modestly in both Finland and the Eurozone, though overall sentiment remains fragile and household consumption in Finland is still weak, according to Etla’s latest forecasts. However, research from the Fashion and Sports Commerce Association indicates that both brick-and-mortar and online fashion sales volumes in Finland have increased over the past three reported months (June-Aug), suggesting a more supportive backdrop for Marimekko's domestic business, which represents over 50% of total revenue.
APAC and Finnish wholesale to accelerate growth
In the seasonally strong Q3, we model sales growth of some 9%, driven by continued strength in Finland and a return to growth in the APAC region. According to management, domestic wholesale deliveries are weighted toward H2 this year, which we expect to drive domestic growth in Q3 to 7%. We model international sales to increase by 10%, supported across all regions but primarily by APAC, where we expect growth to recover aided by store openings. Only three of the planned 10–15 new stores opened during H1, and we expect the pace to have picked up during the quarter, with APAC remaining the main expansion area. While the increase in store count is likely to drive higher OPEX in Q3, we estimate adj. EBIT to increase to EUR 13.0m, driven by higher volumes. For the FY, we keep our estimates at net sales of EUR 193m and adj. EBIT of EUR 34.5m with a margin of 17.9%.
ACCUMULATE with a TP of EUR 14.0 (prev. EUR 13.5)
Marimekko trades at 16–15x adj. EV/EBIT on our 2025–26E estimates. The valuation looks rather neutral following peer multiple expansion, despite the ~10% increase in share price since our latest update. We revise our TP to EUR 14.0 (prev. EUR 13.5) and keep our ACCUMULATE rating.