The Thule Group reported an increase in net income to 185 million Swedish kronor (€18.9m-$21.9m) for the third quarter, up by 18.5 percent from SEK 156 million in the year-ago period. Continuing a positive trend, sales grew by 6.9 percent to SEK 1,385 million (€141.4m-$164.2m), rising by 8.5 percent on a constant-currency basis.
The gross margin declined to 41.1 percent from 41.8 percent in the year-ago quarter, due primarily to higher raw material prices, but the underlying operating margin (Ebit) increased by 0.2 percentage points to 18.6 percent, in spite of strong investments in product development in traditional categories and new ones, such as luggage and strollers. Adjusted for exchange rate fluctuations, the margin remained unchanged.
As previously reported, in September Thule presented new financial targets, calling among other goals for an improvement in the annual Ebit margin from about 17 percent to 20 percent. It also announced a new segmentation of its product lines, creating three new categories: Packs, Bags & Luggage; Active with Kids; and RV Products.
During the third quarter, the Swedish company's sales went up on a currency-adjusted basis by 3 percent in the Americas and by 11 percent in Europe and the rest of the world. The lower growth rate in the Americas was attributed largely to the tougher conditions being faced by retail chains with physical stores in U.S. shopping malls. The fastest category in the region was Active with Kids.
Sales went up in the Americas as well as in Europe and the rest of the world in Packs, Bags & Luggage, driven by the new Thule Subterra collection of suitcases and smaller bags for everyday use by the modern business traveler.
Thule has been launching many new products in this segment, including some new hiking backpacks such as the Thule AllTrail, which can also be used everyday. It has also introduced a series of bike hydration packs with some patented solutions, called Thule Vital.
Active with Kids was also the fastest category in Europe and the rest of the world, thanks to robust growth in multisport trailers, child bike seats and strollers. Thule continues to capture market shares with its recreational vehicle (RV) products in a booming European motorhome and caravan market.
The management noted that almost 30 percent of the 200,000-odd participants in the recent Caravan Salon in Cologne, the world's biggest RV fair, were first-timers, and that their average age has gone down.
Bike racks, roof racks and boxes continued to perform well in the company's biggest category, Sport & Cargo Carriers. RV represents 12 percent of Thule's turnover.