Marimekko - Resilient performance amid uncertainty

Volume led estimate beat for Q1

Marimekko’s Q1 net sales were higher than we estimated at EUR 39.6m (EUR 37.4/38.3m Evli/cons.). Net sales in Finland developed according to our estimates yet growth in international markets exceeded our projections. The important APAC region sales declined 3% while we estimated growth of 5%. Wholesale sales in APAC fell short of our expectations, and licensing income came in at EUR 0.0m while we had expected drop to EUR 0.5m. On the other hand, growth in Scandinavia and Europe far exceeded our estimates. Gross margin was slightly lower than we had expected especially due to higher discounts. Also, lower licensing income and higher fixed costs affected margins negatively y/y. Adj. EBIT amounted to EUR 4.4m (EUR 4.0/4.5m Evli/cons.), reflecting a margin of 11.1%. EBIT in absolute terms beat our estimates due to higher-than-expected volumes, on the other hand, the profitability was rather well in line with our estimates at 11.1% (Evli est. 10.8%).

Expecting a more pronounced acceleration towards H2

We have not made substantial changes to our estimates. Marimekko’s fiscal year is typically upward-trending, yet we estimate this effect to be more pronounced this year compared to 2024. The main driver behind the expected acceleration is the timing effect of domestic wholesale deliveries which will be weighted clearly to H2 this year as guided by the company. We do not currently model significant tariff headwind. On the profitability side, difficult market environment is likely to continue to affect achievable gross margin levels during the coming quarters. We still expect that Q1 was the most heavily affected as the gross margin was also negatively affected by lower licensing income. While we continue to estimate lower licensing income for 2025 overall, we expect the y/y negative delta to come down going forward. We now model net sales of EUR 193.9m for 2025E and adj. EBIT of EUR 34.5m with a margin of 17.8%. As expected, Marimekko left its guidance unchanged for 2025 as it continues to expect net sales to grow and comparable EBIT margin to be some 16-19%. 

ACCUMULATE with a TP of EUR 13.5 (prev. EUR 13.0)

After slightly better than expected Q1, we revise our TP to EUR 13.5 (prev. EUR 13.0) while maintaining recommendation at ACCUMULATE. Our new target values Marimekko at 16-14x EV/EBIT and 20-18x P/E on our estimates for 2025-2026E. We find the current valuation levels to be well in line with the peer group.