Sweden's New Wave Q3 net sales rise to record

Overview

• Sweden promotional products supplier's Q3 net sales rose 11.3% yr/yr to record level

• Operating profit and net income increased, with operating margin rising to 13.2% from 10.6%

• Company completed Uhlsport acquisition after quarter-end, seen as strategically important

Outlook

• Company says investments may pressure earnings in the short term

• New warehouse in Dallas expected to support US growth, with full effects seen in a few quarters

• Acquisition of Uhlsport expected to initially pressure gross and operating margins

Result Drivers

• ORGANIC GROWTH - Co reported 3% organic sales growth in Q3, with management noting continued improvement compared with the previous quarter

• ACQUISITION IMPACT - Recent acquisitions, including Cotton Classics, weighed on operating margin in Q3, according to CEO Torsten Jansson

• STABLE GROSS MARGIN - Gross profit margin remained stable at 50.1% despite full-quarter inclusion of Cotton Classics

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the apparel & accessories peer group is "buy"

• Wall Street's median 12-month price target for New Wave Group AB is SEK116.50, about 14% above its November 10 closing price of SEK102.20

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 11 three months ago

Reuters Recommended Reads

• Nov 10 - Sweden's Genovis Q3 net sales rise 34% on record genomics segment

• Nov 10 - Sweden's Mentice Q3 sales, orders rise on demand from medical device, healthcare systems sectors

• Nov 10 - Sweden's EG7 Q3 revenue rises 40% on strong studio growth

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)