Marimekko, the iconic Finnish design company known for its vibrant and eye-catching prints, has raised its profit guidance for the full year. In its half-year report, the company had already projected that annual net sales would surpass the €123.6 million achieved in the previous year, with the operating profit margin expected to be “approximately on par with or higher than” the previous margin of 16.3%.
However, Marimekko has now revised its guidance by removing the lower end of the operating profit margin range. This indicates that the company anticipates its operating profit margin to be higher than the previous year. The timing of this update is noteworthy as Marimekko is set to launch its highly anticipated collaboration collection with global sportswear brand Adidas next week. The company has also expressed that the uncertainties stemming from the pandemic for the remainder of the year have decreased, leading to a more optimistic outlook.
This development carries significance for Marimekko as a substantial portion of its euro-denominated net sales and earnings typically occur in the second half of the year, due to the seasonal nature of its business. Although the company expects the relative growth of net sales to slow down in the latter part of the year, it attributes this to the unusually negative impact of the pandemic on sales during the same period in 2020.
While Marimekko acknowledges the overall reduction in pandemic-related uncertainties, it remains aware of the ongoing challenges faced by global supply chains due to Covid-19. The company acknowledges that if these disruptions persist, it could potentially affect the availability of its products and subsequently impact net sales and profitability for the rest of the year.
In its half-year results announced in August, Marimekko reported a remarkable 28% increase in net sales, reaching €61.8 million. This growth was driven by strong wholesale and retail sales in Finland, as well as growing wholesale sales in the Asia-Pacific region and Scandinavia, along with increased licensing income in the EMEA region. Additionally, the company’s operating profit for the first half surged from €3.9 million in the previous year to €11.1 million.
Marimekko’s upwardly revised earnings guidance reflects its confidence in its ability to successfully navigate the challenges posed by the pandemic and leverage its strong brand and appealing product offerings. With the highly anticipated collaboration with Adidas on the horizon and continued growth in key markets, the company aims to maintain its positive momentum and deliver robust financial performance for the full year. However, it remains cautious about the potential impact of ongoing supply chain disruptions and other uncertainties associated with the pandemic.
Links:
– Marimekko Official Website
– Adidas Official Website
