Björn Borg (BORG) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 net sales of SEK 285.1 million, up 8.8–9% year-over-year, driven by strong e-commerce (up 31.5–32%) and distributor growth, with Germany up 44%.

• Sports apparel and footwear led category growth, up 25% and 29% respectively; underwear stable or slightly declined, bags declined in Q3.

• Operating profit rose 2.8% to SEK 42.0 million, with net income up to SEK 35.0 million; profit margin for Q3 was 15.5%.

• Financial solidity remains strong with an equity ratio of 46.7–47% and net debt/EBITDA at 1.21.

• Footwear business integration completed after license partner bankruptcy, driving category growth but impacting gross margin.

Financial highlights

• Net sales reached SEK 285.1 million, up 8.8–9% year-over-year; gross margin declined 0.5 ppt to 52.1% due to footwear integration.

• Operating profit increased by 2.8% to SEK 42.0 million; net income for Q3 was SEK 35.0 million.

• Equity ratio at 46.7–47%; net debt (excl. leases) at SEK 138.8–139 million.

• Working capital at 19% of gross sales (12 months rolling), with online channels representing 41% of total business.

• Return on capital employed: 21.3%; return on equity: 22.8%.

Outlook and guidance

• Growth ambition revised to target at least double-digit annual growth, focusing on sports apparel, footwear, and bags, with Germany as the primary market.

• Long-term financial goals: annual sales growth ≥10%, operating margin ≥10%, dividend ≥50% of net profit, equity ratio ≥35%.

• Management expects further growth in footwear and continued strong performance in e-commerce and key European markets.

• Gross margin improvement is a mid- to long-term goal, aiming for 55%, though short-term headwinds from currency and category mix remain.

• No formal forecasts provided; focus remains on growth in sports apparel, footwear, own e-commerce, and the German market.