New Wave Group (NEWA) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales reached a record SEK 2,397.9 million, up 4% year-over-year, with strong cash flow and increased market share despite challenging conditions.

• Operating result for Q2 was SEK 301.2 million, down from SEK 363.9 million last year, mainly due to higher costs and increased market investments.

• Cash flow from operating activities improved significantly, reaching SEK 337.5 million in Q2 and SEK 541.1 million for H1.

• Launched Craft teamwear in the U.S. and Canada, with positive initial client reactions and plans to build inventory through Q3 and Q4.

• Continued investment in market growth, marketing, and automation, leveraging competitor weakness and viewing current spending as strategic for future gains.

Financial highlights

• Q2 2024 net sales: SEK 2,397.9 million, up 4% year-over-year; H1 2024 net sales: SEK 4,393.1 million, down 1% year-over-year.

• Gross profit margin for Q2: 49.0% (down from 49.5%); H1: 49.3% (down from 50.1%).

• Q2 operating margin: 12.6% (down from 15.8%); H1: 11.1% (down from 15.3%).

• Result for H1: SEK 331.4 million (down from SEK 481.8 million); EPS: SEK 2.50 (down from SEK 3.63).

• Cash flow from operating activities for H1: SEK 541.1 million (up from SEK 37.0 million last year).

Outlook and guidance

• Expects growth in the second half of the year, with performance at least matching or exceeding Q2.

• Management remains optimistic for long-term growth, with continued investments in marketing, new establishments, and acquisitions.

• Anticipates profitability in North American teamwear by 2026, with ongoing investments in 2025 and inventory investments projected to reach SEK 200–250 million by 2026.

• Confirmed orders are currently better than last year, supporting a positive outlook.