Marimekko's net sales grow by 7.2%
Considering market conditions, the Marimekko Group's net sales rose strongly, by 7 per cent, during the January-June period of 2011. International sales grew especially well, by 24 per cent. Operating result decreased as expected as a result of considerable investments in internationalisation and increased personnel and marketing costs.
January to June
• Net sales grew by 7.2% to EUR 34.0 million (EUR 31.8 million)
• International sales rose by 23.5%. Sales grew vigorously in Japan and in Central and Southern Europe.
• Sales in Finland decreased by 0.4%. Excluding the impact of changes implemented in sales areas in the Helsinki stores in 2010 as well as the changes made in the distribution network in accordance with the company's distribution strategy, sales in Finland grew at a good rate of about 3%.
• Operating result amounted to EUR -0.4 million (EUR 1.8 million). Operating result for the period includes a non-recurring expense of EUR 0.2 million related to personnel reductions. Operating result without non-recurring items amounted to EUR -0.3 million (EUR 1.8 million).
• Result after taxes for the period was EUR -0.3 million (EUR 1.4 million).
• Earnings per share were EUR -0.04 (EUR 0.17).
• Investments amounted to EUR 3.2 million (EUR 0.5 million).
• Brand sales* grew by 23.5% to EUR 79.8 million (EUR 64.6 million).
• In its interim report published on 3 May 2011, the company announced the following outlook: the Marimekko Group's net sales are estimated to grow by roughly 5-10%, but operating profit is forecast to decline by some 40-60% compared with the previous year. The company specifies its full-year estimate for 2011 within the announced range as follows: net sales growth for the Group is expected to be at the bottom end of the range, close to 5%, and the anticipated decline in operating profit is estimated to be at the top end of the range (roughly 50-60% compared with the previous year).
April to June
• Net sales rose by 6.8% to EUR 16.8 million (EUR 15.7 million).
• Operating result turned negative and amounted to EUR -0.8 million (EUR 0.6 million).
Mika Ihamuotila, President and CEO:
“I am pleased that our investments in international growth were clear to see in the first half of the year. Marimekko's net sales grew by 7.2% and international sales by as much as 23.5%. Brand sales were EUR 79.8 million, up 23.5% on the previous year. Sales in Finland decreased by 0.4%. The decline was partly due to changes implemented in sales areas in the Helsinki stores in 2010 as well as changes in the distribution network, made in accordance with our distribution strategy. Excluding the impact of these changes, sales in Finland grew at a good rate of about 3%. It is also good to note that, in the long run, these changes will have a positive effect on our business operations.
Exceptionally strong investments in internationalisation and product development decreased profitability as expected during the first two quarters of the year and caused our operating result to fall to EUR -0.4 million. Increased personnel and marketing expenses also had a negative impact on profitability. We believe, however, that the earnings trend will improve towards the end of the year, when the investments we have made in expansion begin to bear fruit. It should also be borne in mind that, due to the seasonal nature of our business, the major portion of our net sales and earnings are traditionally generated during the last two quarters of the year and that, in the last quarter, a significant share of sales is accounted for by retail sales.