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Thule Group reports 'good quarter except in the US'

Published October 25, 2019

STOCKHOLM (BRAIN) — Thule Group is reporting healthy sales in its third quarter in all markets except the U.S., where uncertainty about tariffs has caused some retailers to reduce orders. 

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Globally, the company's sales in the third quarter totaled SEK 1,682m ($174 million), an increase of 7.7% over the same quarter last year (3.9% after currency adjustment).

The company said its new products launched in the third quarter were well received. They included a new Thule Spring stroller and new bag collections.

Sales in Europe and the rest of the world rose 6.7% in the quarter after currency adjustment.

In the Americas, however, sales decreased 2% after currency adjustment during the third quarter.

"Summer sales remained weak in the U.S.," CEO and president Magnus Welander commented in a statement. "Additional tariffs of 15%, in place since July on goods produced in China, created further uncertainty in the market. This resulted in several retailers reducing inventory levels, and to some extent that higher prices and uncertainty about mid-term prices had a negative effect on sales to consumers.

"The other markets in the (America's) region demonstrated healthy growth, and it was especially gratifying to see the volatile Latin American market post a strong quarter, which means that these markets show growth for the year.

"Uncertainty in the U.S. market requires operational flexibility and we have therefore decided to review our commercial organization in the country. Any changes will be communicated and implemented during the fourth quarter," Welander said. 

Globally, underlying EBIT amounted to SEK 274 million, an increase of 2.6% and a margin of 16.3%. Adjusted for exchange rate fluctuations, the margin declined 1.4 percentage points.

Operating income totaled SEK 249 million and was impacted by a cost of SEK 25 million from a product recall in Thule's RV products division. Net income was SEK 181 million.

 

Topics associated with this article: Tariffs, Earnings/Financial Reports

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