CEO's review Q3 2024
“We delivered another solid quarter considering the continued challenging market environment globally. Our comparable net sales decreased by 7%, and our reported net sales, which include Georg Jensen, increased by 6%.
We were able to deliver improved profitability despite lower volumes. In the third quarter, our comparable EBIT increased to EUR 24 million, driven by our ongoing SG&A savings and supply chain efficiency programs. I am happy to share that our gross margin reached 48.1%. This is an all-time high gross margin for a third quarter, increasing by 90 bps from last year.
The third quarter marked the first full year of Georg Jensen as part of Fiskars Group. We now operate on a business-as-usual basis and are well on track with cost synergy realization. The Georg Jensen acquisition is a great example of how we execute our M&A toolbox, and how we drive the brands. In January-September 2024, Georg Jensen already delivered significant profitability improvement compared to historical patterns.
Looking at our guidance for 2024, we are maintaining it intact and expect comparable EBIT to be slightly above last year’s EUR 110 million. As a result of the Georg Jensen acquisition, our EBIT generation has shifted even more toward the end of the year, especially the fourth quarter. During this period, Business Area Vita’s volumes are expected to play a significant role and reflect the seasonal pattern, but they are not assumed to exceed the previous year’s levels. Savings from our completed efficiency enhancing programs are expected to support EBIT throughout 2024.
In line with our strategy, we continue building on growth fundamentals which will elevate us once the market environment improves. Our transformation levers – commercial excellence, Direct-to-Consumer (DTC), the U.S., and China, play an integral role in delivering our ambitions. Looking at the first three quarters of the year, our gross margin, which is our key performance indicator for commercial excellence, increased by 170 bps. Comparable DTC sales decreased by 3%, mainly due to store closures as well as the slowdown of e-commerce in China. Total comparable net sales in China increased by 3%, and we opened five new stores in the country – both good examples of our local teams’ dedication in challenging market conditions. In the U.S., comparable net sales decreased by 8%, as retailers’ cautiousness in taking inventories continued to affect demand.
As additional growth building blocks, we have launched several category expansion initiatives to surround the consumer. For instance, during the third quarter, Wedgwood introduced fine bone china pet bowls for the first time, Georg Jensen launched new home appliances and Moomin Arabia came out with a new textiles collection. These demonstrate the pioneering design spirit of our teams.
When it comes to sustainability, I am pleased to announce that we have reached our supplier engagement target ahead of schedule. We want to partner with the right suppliers who also have set science-based targets in order to reduce emissions throughout our value chain.
Although we are still not expecting any immediate improvement in the market conditions, our teams are fully focused on executing this upcoming end-of-year holiday season. I am confident that the actions we are taking support us going forward and continue to lay the foundation for stronger growth and performance in the future.”
NATHALIE AHLSTRÖM
President & CEO