Björn Borg (BORG) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 2025 net sales of SEK 280 million, up 9% year-over-year, driven by strong growth in footwear (+208%) and sports apparel (+13%), with e-commerce up 26%.

• Wholesale channel grew 11%, own e-commerce surged 26%, while own retail declined 12% due to store closures; distributor sales fell 21%.

• Brand momentum and market share increased, especially in Germany and Sweden, supported by focused marketing and product launches.

• Geographically, the Netherlands (+22%), Sweden (+11%), Denmark (+22%), and Belgium (+38%) showed strong growth, while Germany declined 21%.

• Footwear business fully integrated after license partner bankruptcy, now a key growth driver.

Financial highlights

• Gross profit margin declined to 49.9% (currency-neutral 50.9%), mainly due to product and channel mix, especially the larger share of footwear.

• Operating profit increased to SEK 34.2 million (currency-neutral SEK 37 million, +10.5% year-over-year).

• Net income rose to SEK 36 million, with profit after tax up 69.4% to SEK 35.9 million, benefiting from positive foreign exchange effects.

• Equity-to-assets ratio at 52%, above the 35% target, with net debt at SEK 120–121 million due to increased footwear inventory.

• Cash flow from operating activities was SEK -115.2 million, impacted by higher working capital.

Outlook and guidance

• Long-term targets: annual sales growth of at least 10%, operating margin of at least 10%, annual dividend of at least 50% of net profit, and equity/assets ratio of at least 35%.

• Focus remains on profitable growth in sports apparel, footwear, own e-commerce, and the German market.

• Expectation of margin improvement over time, especially in footwear, with a long-term gross margin target of 55%.

• Zalando business expected to recover gradually through the year after Q1 delays.

• Management expects tariffs to have minimal impact and a weaker dollar to be positive.