Fenix Outdoor International has reported record fourth-quarter earnings driven by surging sales in its Frilufts segment and the delivery of goods delayed in the previous three months from the Brands division. The company said net sales for the three months to December 31 rose by 33 percent to €196.5 million from 2020, despite a hit at the end of the year from the Omicron Covid variant. Operating profit more than trebled year on year to €17.6m.
“All this was driven by a consumption boom in most retail channels as well as (the) weather giving us good support with cold weather in many markets,” said chairman Martin Nordin, who added that Germany – Fenix’s biggest market – showed a “distinct recovery,” especially in retail.
North American sales also hit full-year and fourth-quarter records, including topping annual sales of more than $100m for the first time.
Group sales for 2021 rose to €649.9m from €563m. Operating profit was up 37 percent to €84m and earnings before interest, tax, depreciation and amortization came in at €135.3m from €110.1m. Quarterly profit margin rose to 9 percent from 3.5 percent and 12.9 percent from 10.9 percent annually.
In the Brands division, which includes house labels Hanwag and Fjällräven, sales increased 33 percent to €51.1m and were up 12.8 percent for the year to €168.5m. Quarterly operating profit rose to €8m from €6.1m but was hit by high freight costs.
The Retail division, called Frilufts, reported a 34.7 percent rise in net sales to €102.4m for the final quarter, driven by stronger gross margins, favorable weather in Scandinavia and a weak comparator in 2020 when Germany’s Globetrotter stores were closed.
Nordin noted that customers were returning to brick-and-mortar stores, notably in Germany. Operating profit rose to €8.9m from €0.7m in the quarter and swung to a healthy €12.9m for the year from a loss of €1.6m in 2020.
Fenix’s digital business grew by 24 percent in the quarter on an annual basis, accounting for a quarter of sales and 36 percent of DTC sales, both measures slightly lower as customers returned to stores.
Nordin said he was uncertain how many people who took up outdoor activities during lockdown could be retained as “new core users.” He also highlighted cost pressures from IT upgrades, wages, and staff retention.
For the first quarter of 2022, Nordin said the company had not faced any logistical challenges as most deliveries to retail customers had been received early in January. However, he cautioned that problems could arise later in the quarter and first half “if sell-through exceeds expectation too much.” “For the rest of the year, the fall season order book looks very good in almost all markets indicating good growth,” he added.