The New Wave Group, the Swedish company behind Craft and Cutter & Buck, said the fourth quarter “goes down in history” as the best so far for the company. Sales jumped in the three months ended on Dec.31 by 19 percent to 1,940 million Swedish kronor (€183.8m-$209.4m), or by 14 percent in constant currencies. Earnings for the period climbed by 8.2 percent to SEK 158.9 million (€15.1m-$17.2m).
The group witnessed growth in each segment, but Sports & Leisure stood out, with revenues soaring by 26 percent. The retail sales channel increased by 22 percent, while the promo sales channel advanced by 18 percent.
The management said that Craft performed very well, making tremendous progress with its Teamwear/Club investments. Major European football clubs such as Dresden, Darmstadt, Zwolle and Gent are endorsing Craft's products. Craft has also signed a three-year agreement with Spartan USA, which stages 287 obstacle course races per year in 32 countries. The agreement covers both clothing and footwear and has an estimated sales value of $30 million during the three-year agreement term.
The management also highlighted the strong development of Cutter & Buck in the U.S., Canada and Europe.
Overall sales in the Sports & Leisure channel increased by 26 percent to SEK 750.1 million (€71.1m-$81.0m). The segment's Ebitda climbed by 21.1 percent to SEK 84.4 million (€8.0m-$9.1m). Sales progressed in both sales channels and in all regions. Along with Craft and Cutter & Buck, the division includes the Seger and Ahead brands, along with the distribution of Speedo in Scandinavia, among other brands and activities.
In the corporate channel, sales increased by 18 percent, and they gained by 5 percent in the Gift & Home Furnishing channel.
By region, the group's total turnover in Sweden advanced by 7 percent, boosted by growth in both channels. Revenues from the U.S. jumped by 33 percent, aided by favorable foreign exchange rates. Sales in other Nordic countries increased by 15 percent, while revenues in Central and Southern Europe rose by 10 percent and 17 percent, respectively. Revenues from other countries jumped by 55 percent, boosted by the group's operations in Asia and Canada.
Overall, New Wave's gross margin went up by 0.8 percentage points to 46.4 percent. The operating margin rose by 0.2 percentage points to 10.8 percent.
For the full year 2018, revenues gained 12 percent to SEK 6,290 million (€596.2m-$679.3m), or 15 percent in constant currencies. The gross margin improved by 0.5 percentage points to 46.6 percent, while the operating margin declined by 0.7 percentage points to 7.7 percent, due to higher costs associated with expanded sales and marketing activities, as well as improvements in distribution centers. The group's net income inched up by 1.7 percent to SEK 360.0 million (€34.1m-$38.9m).