Marimekko - Strong start, momentum to continue
Marimekko's Q1 came in above our estimates, with profitability supported by an improved relative sales margin and positive operating leverage. We expect mid-single-digit sales growth and stable earnings delivery to continue throughout the year.
Q1 results above expectations
Marimekko's Q1 net sales of EUR 41.4m exceeded our estimates, driven by strong international growth. The momentum was broad-based, with North America, Scandinavia, and Europe all delivering above expectations, while APAC was flat in line with our estimate as wholesale order timing weighed on the region as previously flagged. Domestic net sales held flat against our estimated decline, supported by stronger-than-expected non-recurring promotional deliveries in wholesale, which offset continued retail weakness reflecting the tactical operating environment. Adj. EBIT of EUR 5.3m beat our EUR 4.2m estimate, with the 12.7% margin supported by an improved relative sales margin and positive operating leverage (OPEX +2% vs. net sales +5%). As expected, Marimekko left its guidance unchanged (net sales to grow and comparable EBIT margin to be some 16-19%).
International momentum to drive steady growth
We have made marginal upward revisions to our estimates following the Q1 beat and now model net sales of EUR 200.1m (+5% y/y) for 2026E and adj. EBIT of EUR 34.8m with a margin of 17.4%. Marimekko's fiscal year is typically upward-trending, and we expect this pattern to be reinforced this year as domestic non-recurring promotional deliveries are concentrated in H2, similar to last year. We model mid-single-digit revenue growth across the remaining quarters, supported by continued international momentum and growing Finnish wholesale. APAC quarterly revenues are expected to stabilize at typical run-rate levels following the Q1 wholesale timing, with continued store network expansion and entry into Indonesia and the Philippines providing further contribution. On the profitability side, we expect Q2 EBIT to come in slightly below the comparison period, reflecting management's explicit guidance for fixed cost growth to be significantly stronger in Q2 than Q1. In H2, we expect EBIT margin to improve y/y, although potential logistics cost pressure from the ongoing war in Iran adds a layer of uncertainty.
BUY with a TP of EUR 12.0
After only minor changes to our estimates, we keep our TP at EUR 12.0 and reiterate our BUY rating. Marimekko trades at undemanding 2026-2027E P/E of 16-15x and EV/EBIT of 12-11x, with upside relative to peers and historical multiples.