Marimekko - Strong momentum set to continue
Marimekko’s Q3 brought no major surprises, with both net sales and profitability roughly in line with estimates. Despite the subdued market environment, we expect the strong development to continue in Q4.
Q3 came in as expected
Marimekko's Q3 net sales came in largely as expected at EUR 50.8m (Evli est. EUR 51.3m), up 8% y/y. Growth was driven by wholesale in both domestic and international markets, particularly supported by promotional deliveries in Finland, which were weighted to H1 last year. The sales mix between domestic and international markets developed broadly in line with our forecasts, though with some regional variation. APAC and North America came in slightly below our estimates, while Scandinavia performed better than expected. Adj. EBIT reached EUR 12.7m (Evli: EUR 13.0m), up ~14% y/y. The improvement was driven by higher volumes, though partially offset by increased fixed costs, particularly personnel expenses related to wage increases, and a somewhat weaker relative sales margin due to higher discount levels compared to the previous year.
Estimates largely unchanged despite revised outlook in APAC
Marimekko reiterated its 2025 guidance, with net sales expected to grow from 2024 levels and a comparable EBIT margin of 16-19%, but revised its APAC outlook, now expecting regional net sales to remain roughly at the previous year's level or increase slightly (prev. to increase), reflecting mainly lower licensing income. Our estimates for 2025E remain largely unchanged at net sales of EUR 193m (+5% y/y) and EUR 34.2m comparable EBIT (17.7% margin). We forecast Q4 sales growth of ~7%, with wholesale sales in Finland and APAC as key drivers, while we expect retail sales in Scandinavia and Europe to remain strong. We expect promotional deliveries to continue to support domestic sales, while APAC should grow through franchise-driven wholesale sales, despite the lower licensing income. We expect volume growth to support both EBIT and margin improvement in Q4, though we forecast higher personnel and marketing expenses to partly offset the gains.
ACCUMULATE with a TP of EUR 14.0
The valuation picture remains intact after the Q3 results. Marimekko is valued at adj. EV/EBIT 15-13x and adj. P/E 20-17x, which is a rather neutral level in both absolute and relative terms. We keep our target price of EUR 14.0 and maintain our ACCUMULATE rating.