The outdoor trend, which kicked in shortly after the first Covid-19-related lockdowns, has once again brought good sales growth for the Swedish Thule Group. The trend toward outdoor and leisure activities closer to home continued to positively impact all of the group’s product categories in the third quarter. According to a preliminary report, net sales totaled 2.77 billion Swedish kronor (€277.4m-$323.1m). Compared with sales in the same quarter of 2020, that’s double-digit growth of 13.8 percent (16.2% after currency adjustment). While the Americas region grew by a whopping 39.6 percent (44.6% currency-neutral) to SEK 850 million (€85.1m-$99.1m). sales in the Europe and Rest of World region rose by 5.1 percent (6.9% currency-neutral) to SEK 1.92 billion (€192.3m-$224m).
Thule imposed some price increases during the quarter, but they were insufficient to offset an increase in manufacturing and shipping costs, leading the gross margin to decrease to 40.6 percent from 42.9 percent in the year-ago period. The operating margin was off by 0.2 percentage points to 24.2 percent for the quarter, but it was 0.1 higher after eliminating foreign currency effects.
The group’s revenues for the first three quarters of 2021 jumped by 37.2 percent (44% currency-neutral) to SEK 8.54 billion (€855.4m-$996.2m) compared to the first nine months of last year. However, it should be noted that the pandemic had a negative impact on sales in the comparable period, particularly in April and May last year.
The operating margin for the first three quarters went up sharply to 25.2 percent from 21.7 percent in the year-ago period. It was positively impacted by strong sales growth during the year, with a relatively high gross margin of 41.4 percent - down by 0.6 percentage points from the year-ago period - and low operating costs. The release of a provision of SEK 15 million (€1.5m-$1.7m) for an earn-out payment for Tepui Outdoors’ acquisition at the end of 2019 brought net profit for the first three quarters of 2021 to SEK 1.64 billion (€164.2m-$191.3m), compared to just SEK 1.0 billion (€100.2m-$116.7m) in Jan.-Sept. 2020.
The ongoing positive sales trend has had a particular impact on the “Sport & Cargo Carriers” and “RV Products” categories. All product groups have performed well and gained market share within these two categories – despite the challenge of meeting the high demand. Ever-increasing manufacturing costs have been caused by “generally rising material prices, extreme freight prices and costs related to overtime and additional personnel in our assembly plants,” the company said, leaving no choice but to raise sales prices to partially compensate for the rising costs. “It will not be until after the planned price increases in 2022 are implemented that we expect to be able to compensate for increased input costs fully,” the group’s preliminary report states.
