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Sweden's New Wave Q3 net sales rise to record

By Reuters News


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

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Sales

SEK 2.66 bln

Q3 EPS

SEK 1.77

Q3 Net Income

SEK 253 mln

Q3 Adjusted Free Cash Flow

SEK 126 mln

Q3 EBIT

SEK 352 mln


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.)

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