Marimekko Corporation's announced Interim report, 1 January - 31 March 2011. During the January-March period of 2011, the Marimekko Group's net sales increased in line with expectations. Investments in distribution network and development of business operations caused operating profit to fall.
• Net sales grew by 7.7% to EUR 17.2 million (EUR 16.0 million). Sales in Finland increased by 3.7% and international sales rose by 14.5%. • Operating profit was EUR 0.4 million (EUR 1.2 million), which was down 70.6%. Operating profit for the period includes a non-recurring expense of EUR 0.2 million related to personnel reductions. Operating profit excluding non-recurring items decreased by 56.7% to EUR 0.5 million (EUR 1.2 million). • Profit after taxes for the period was EUR 0.3 million (EUR 0.9 million). • Earnings per share were EUR 0.04 (EUR 0.12). • Investments amounted to EUR 1.6 million (EUR 0.3 million). • The full-year forecast for 2011 remains unchanged: the 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. • Brand sales of Marimekko products were EUR 38.9 million (EUR 34.4 million), up 13.0%.
Mika Ihamuotila, President and CEO:
“Development in the first quarter of the year was as expected. Net sales of the company increased as anticipated, by 7.7%, reaching EUR 17.2 million. Estimated brand sales of Marimekko products during the period rose by 13.0%. The Group's profitability, however, fell significantly: operating profit declined by 70.6% and was EUR 0.4 million. Operating profit for the period includes a non-recurring expense of EUR 0.2 million related to personnel reductions.
“Operating profit excluding non-recurring items decreased by 56.7% to EUR 0.5 million. Earnings were depressed by substantial investments in developing our business operations and distribution network in the United States, increased personnel expenses as well as a decrease in royalty income.
“In addition, marketing costs for the period were higher than in the comparison period. Marketing expenses in the corresponding period of 2010 were exceptionally low, while store openings and different events celebrating the company's anniversary raised marketing costs in the first quarter of the current year. Earnings were improved by increased sales in Japan, North America, Finland as well as Central and Southern Europe.
“During the review period, a new flagship store was opened in Helsinki, and Japan saw the opening of its 21st Marimekko concept store. In February, we announced a machinery investment for our textile printing facility, which will triple the output capacity of the factory. The added capacity will be deployed in stages; the investment will enable us to prepare for higher demand in the future.
“Our special focus during the period was on the United Sates where we were working closely on building e-commerce and related logistics as well as our flagship store which will be opened in New York City. Our collaboration with the American company Converse, launched globally in February, has been a success both commercially and in terms of international media coverage. Our collaboration with the home furnishings retailer Crate and Barrel is expanding.
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