Continuing its strong growth trend for the fourth quarter in a row, the Swedish-based Thule Group reported improved results for the second quarter ended June 30. Net sales went up by 58.1 percent to 3,229 million Swedish kronor (€315.5m-$371.4m) compared to the same period a year ago, when major markets were affected by significant lockdowns. Sales rose by 68.5 percent on a constant-currency basis, and they were also 39 percent higher than in the more normal second quarter of 2019.
The company’s CEO, Magnus Welander, admitted that Thule was unable to fully meet the demand, despite a highly flexible production structure but said that Thule is “well equipped to capitalize on the opportunities offered by a strong trend toward leisure and vacation activities nearer to home.” Welander is predicting “a longer peak season that will continue into the third quarter since we strongly believe that consumers who have waited for vaccination and a larger degree of travel freedom will continue to want to purchase our products.”
However, to compensate for higher costs, Thule said it has decided to raise its own prices in two steps, first on July 1 of this year and then on Jan. 1, 2022.
In the second quarter, Thule’s net income more than doubled to SEK 672 million (€65.7m-$77.3m) from SEK 312 million in the year-ago quarter. The gross margin improved by 1.6 percentage points to 42.2 percent. Despite generally higher raw material costs, “extremely high” freight charges and various other supply chain challenges, the company’s operating income rose by 106.4 percent, resulting in an improved margin of 27.4 percent, up from 21.0 percent in the year-ago period. In terms of local currencies, the operating margin rose by 5.2 percentage points.
On a currency-neutral basis, Thule’s sales in the Americas region increased by 53 percent in the second quarter and by 65 percent for the first six months of this year, with good performance in all the categories.
In Europe and the rest of the world, sales jumped by 66.9 percent to SEK 2,446 million (€238.6m-$281.1m) in the second quarter. They grew by 74 percent for the quarter and by 62 percent for the first half in local currencies. In these geographies, the Sport & Cargo Carriers category performed strongly in all product groups, benefitting from greater use of cars and bikes for transportation. Thule claims that it captured market shares with its strong product portfolio and good deliveries, despite challenges in meeting the significantly higher demand.
The management reported a “very positive” development in Europe and the rest of the world for bike trailers, child bike seats and strollers in the Active with Kids category. The RV Products category “continued to perform very well, in line with the high production rate among manufacturers of recreational vehicles.