Excluding the snow chain business divested in 2015, the Thule Group's net income from continuing operations increased by 21.5 percent to 169 million Swedish kronor (€18.2m-$20.7m) on 5.5 percent higher revenues of SEK 1,380 million (€148.8m-$169.4m) in the first quarter. The underlying operating profit margin (Ebit) improved to 17.0 percent from 15.7 percent in the year-ago period, and it went up by 1.3 percentage points when adjusted for exchange rate fluctuations, thanks to a higher product mix and new efficiencies in sourcing and logistics.
On a currency-neutral basis, sales expanded by 6.0 percent, with a predicted decline of 4 percent in the Americas offset by growth of 11 percent in Europe and the rest of the world. On the same basis, sales grew at a higher rate of 6.2 percent and reached SEK 1,265 million (€316.4m-$155.3m) in the Outdoor & Bags segment. The balance of the revenues came from the very small Specialty segment, where Thule is going on with a strategic review of the Work Gear operation in the U.S.
Outdoor & Bags sales were driven by new bike carriers, backpacks and other new products in Europe and the rest of the world. The segment's operating margin grew by 0.5 percentage points to 18.9 percent and reached 19.1 percent on an underlying basis.
Thule raised the number of stores selling its sports strollers and bike trailers in Europe and the rest of the world. The expanded range of Thule backpacks proved to be a particularly positive category, although the quarter is not a strong period for this type of products. The new products included the customizable Thule Versant hiking backpack and the Thule Stir pack.
The company continued to restructure its operations during the quarter, particularly in the U.S. and Asia. It opened a new and more efficient roof box plant in Chicago, and a new third-party distribution center in the western part of the U.S., in a first step toward a major reorganization of the North American distribution structure that will be implemented over the next 18 months. The Asian third-party distribution center was relocated from Hong Kong to Yantien on the Chinese mainland.