Björn Borg posts 21 percent increase in Q1 net sales

The Björn Borg Group’s net sales amounted to 158.1 million Swedish krona (18.9 million dollars) in the first quarter, an increase of 21 percent. The company said that the positive sales trend compared with the first quarter of 2015 was mainly driven by the Group-owned wholesale and retail operations.

“The performance of our own stores remains good and sales for comparable units increased by over 15 percent compared with Q1 2015. Our own e-commerce continues to post strong growth, 103 percent. In total, Björn Borg’s sales rose during the first quarter 2016 by 21 percent versus the comparable quarter of 2015,” noted CEO Henrik Bunge.

Detailed review of the first quarter

The product companies’ external revenue decreased from 2015, driven by the Norwegian market, which underperformed the previous year. All Group-owned companies, wholesale and retail, significantly increased their sales compared with the first quarter of 2015. The increases in Sweden, Finland and England, the company said were mainly due to broader distribution of underwear through sporting goods retailers. The increase in the wholesale companies was partly because of a larger share of collection orders for customers’ central warehouses, which generated sales.

Sales improved in the first quarter, mainly of underwear, though footwear also performed well. As a result, brand sales (excluding VAT) rose by 6 percent. Adjusted for currency effects, brand sales increased by 8 percent for the quarter. Brand sales in the underwear product area improved by 14 percent but sports apparel saw a drop in brand sales of 4 percent in the quarter. Brand sales rose in the footwear product area, but fell for bags, eyewear and fragrances. In total, sales of licensed products dropped by 1 percent.

Among large markets, every country except Norway and Belgium reported growth. Sweden and the Netherlands saw the highest growth during the quarter, though Denmark, Finland and England also performed well. Smaller markets continue to decrease compared with the previous year.

Gross profit margin declines

The gross profit margin for the first quarter decreased to 50 percent. The year-on-year decrease in the gross profit margin was due to increased price pressure in the market and a change in the distribution mix at the wholesale level. The product companies’ margins were also affected by pressure on external distributors from lower realised margins in their markets. Due to the combination of higher revenue, a lower gross profit margin and slightly higher operating expenses, operating profit only increased to 13.9 million Swedish krona (1.6 million dollars) during the quarter.

One new Björn Borg was opened during the first quarter, in Uppsala, Sweden, while two were closed, one in Finland and one in Belgium. As of March 31, 2016 there were a total of 40 Björn Borg stores, of which 21 were Group-owned.

picture:bjornborg.com