Marimekko - Mixed development to continue
Marimekko reports its Q2 figures on 14th of August. The trends observed in Q1 have likely continued into Q2, as we expect domestic sales decline while the company’s international growth should continue.
Trade uncertainty temporarily dented consumer confidence
The escalation of trade war in April increased uncertainty and led to decrease in consumer confidence globally. The Euro Area consumer confidence dropped in April yet has recovered slightly since. In Finland, the consumer confidence continued declining throughout the second quarter yet rose slightly in July. Due to the uncertainty, the consumer savings rate has increased and ETLA Economic Research has lowered its forecasts for Finnish private consumption of durable and semi-durable goods in 2025. Consumption is projected to rebound in 2026–2027, following a period of subdued demand after the post-COVID peak.
Expecting domestic sales to continue to decline y/y
After minor revisions, our estimates remain practically unchanged prior to the Q2 print. For 2025E, we estimate net sales of EUR 194m and EBIT of EUR 34m with an EBIT-margin of 17.7%. Marimekko estimates 2025 EBIT margin to be some 16-19%. We believe that reaching the upper end of the profitability guidance range would require a notable improvement in domestic market conditions. We expect the trends seen in Q1 to have largely continued in Q2. We model net sales decline in Finland driven by lower wholesale sales while we continue to forecast slight growth in domestic retail. International growth should continue albeit at a slightly lower pace compared to the very strong Q1. We expect APAC to show strong year-over-year growth, benefiting from a slightly easier comparison period and net increase in store count. Licensing income is expected to fall slightly in Q2 compared to last year. However, as we are forecasting relatively stable licensing income, we anticipate milder impact on gross margin from lower licensing compared to Q1. Operating expenses are expected to remain relatively stable as a proportion of net sales in Q2.
ACCUMULATE with a TP of EUR 13.5
Marimekko is priced at 15-13x EV/EBIT and 20-17x P/E based on our estimates for 25-26E. We see the current valuation rather neutral on both absolute and relative terms. Marimekko is currently trading close to par compared to the aggregate peer group average (premium & luxury goods companies).