Warm weather in September affected sales of Fenix Outdoor International around the end of the third quarter, yet the Swedish-based outdoor brand owner and retailer managed raise sales and a more significant increase in operating profit for the three months until the end of September.
The entire group's sales were up by 6 percent to €147.9 million, with increases across its wholesale and retail business. Its operating profit reached €31.5 million, an increase of 15.9 percent compared with €27.2 million for the same quarter last year – and that included an extraordinary capital gain of €3.0 million relating to the divestment of Globetrotter's stake in Transa Backpacking, the Swiss outdoor retailer. Fenix ended the quarter with profit of €23.6 million, up by 33.3 percent.
Martin Nordin, the group's chief executive, pointed out in a statement that the improvements were achieved despite the unseasonal weather in September, in the Nordics as well as Central Europe and the U.S. market. It dampened the performance for the quarter, which went off to a very strong start in the summer. Nordin took pride in the company's return to a pre-tax profit margin above the long-term target of 10 percent, on a rolling twelve-month basis.
The Fenix group's retail business, encompassing Globetrotter in Germany along with Naturkompaniet in Sweden and Partioaitta in Finland, delivered a slight sales increase of €0.5 million to €75.9 million for the quarter. Its operating profit almost stabilized, with a drop of €0.5 million to €7.4 million. This division suffered operating losses for the three previous quarters, albeit gradually diminishing.
The retail division includes 57 stores as well as online sales, compared with 60 stores at the end of September 2015. The latest Fjällräven store opened in Hong Kong in September, to function as a showcase for Asian markets. The group thus boasts 16 stores in the U.S., four in Europe and one in Asia.
Despite the small quarterly increase, the retail division's sales were still down by 0.8 percent to €191.9 million for the first nine months of this year. That includes a decline of 3.9 percent to €136.1 million for Globetrotter, while Naturkompaniet raised its turnover by 13.9 percent to €38.4 million and sales were up by 2.4 percent to €17.3 million for Partioaitta.
The group said that Globetrotter was improving as planned, with lower sales but a better margin and cost situation. Partioaitta is steady despite the weak Finnish retail market. The division managed an operating profit of €4.2 million, compared with an operating loss of €7.6 million for the same nine months in 2015.
With brands led by Fjällräven, Hanwag, Tierra, Primus and Brunton, the brands division brought in sales of €29.9 million, up by 14.2 percent for the quarter. Fenix says that the rise was driven by the continued expansion of the Fjällräven brand. The division managed a sharp rise in operating profit, up by €2.0 million to €17.8 million.
The brands segment has been on a growth spurt, with sales increasing by 14.0 percent to €77.4 million for the first nine months of the year. Germany generated a sales increase of 16.8 percent to €39.7 million, and Sweden was the only area where sales of the brands division were down, by €1.8 million to €10.2 million. The segment turned in an ample rise in operating profit, up by 19.9 percent to €38.0 million for the quarter.
Since the start of this year the group has a third division, global sales, grouping together distribution companies that sell more than one of the brands in the Fenix group. It chalked up sales of €39.9 million for the third quarter, an increase of 14.0 percent. The segment's operating profit jumped by €1.8 million to €7.4 million.
The trend was even stronger at the start of the year, leading to a sales increase of 20 percent to €95.4 million for global sales. The division saw a robust increase in turnover in Nordic countries other than Sweden, up by 24.3 percent to €28.6 million. Sales of the Fjällräven brand in North America were transferred to the global sales division, which increased by 25.3 percent to €22.3 million. All of the other geographic areas contributed to the rise in turnover for the nine months. The division's operating profit was on the rise, up by €5.4 million to €14.6 million.
The entire Fenix Outdoor group's operating profit thus soared to €50.9 million for the nine months, up from €27.6 million. Its net profit more than doubled to €35.6 million for the nine months, compared with €15.9 million for the same three quarters in 2015.