The New Wave group, the Swedish company behind Craft, saw the sales of its sports and leisure division dip by 3 percent for the third quarter, as increasing sales in Sweden, other Nordic countries and southern Europe could not make up for sluggishness in the U.S. market. Along with Craft, the division includes the Seger, Cutter & Buck and Ahead brands, and the distribution of Speedo in Scandinavia, among other brands and activities.
Despite the small fall in sales, the division's operating profit inflated by 20.2 percent to 93.5 million Swedish kroner (€9.56m-$10.13m), due to lower marketing costs. Despite some weakness in September, the entire New Wave group's turnover inched up by 2 percent to SEK 1,300 million (€132.9m-$140.8m) for the quarter.
New Wave's gross profit margin was up by 1.6 percentage point to 46.7 percent. Its operating profit margin gained 2.0 percentage points to 9.6 percent and its net profit was up by 32.9 percent to SEK 86.5 million (€8.84m-$9.37m). For the first nine months of this year, the sports and leisure division's sales declined slightly to SEK 1,690 million (€172.8m-$183.1m), but again lower marketing costs enabled it to raise its operating profit by 23.1 percent to SEK 139.5 million (€14.3m-$15.1m).
The turnover of the whole group moved up by 4 percent to SEK 3,688 million (€377.0m-$399.4m) for the nine months, with a negative impact of one percentage point from currency exchange rate changes. New Wave's gross profit margin improved by 0.8 percentage points to 45.9 percent and the operating margin widened by 2.2 percentage points to 6.3 percent. New Wave's net profit surged to SEK 148.9 million (€15.2m-$16.0m), compared with SEK 82.0 million for the same nine months in 2015.
The management predicted that New Wave's results will continue to improve in the fourth quarter. The bigger projects for next year include the launch of Craft Teamwear and investments in Clique and Cutter & Buck in Canada, with the opening of a large warehouse.