The Thule Group reported net income of 308 million Swedish kronor (€32.2m-$35.7m) for its continuing operations in the second quarter ended June 30, up sharply from SEK 278 million in the same period of 2014. The gross margin went up to 41.6 percent from 40.5 percent, due primarily to positive currency effects. The underlying operating margin (Ebit) improved by 1.3 percentage points to 23.2 percent in the quarter through a 12.7 percent increase in operating income. On a constant-currency basis, the margin advanced by 9.9 percent and rose to 16.8 percent on a rolling annualized basis, 0.8 percentage points above the level reached in the past year.
Sales increased by 6.3 percent to SEK 1,795 million (€187.7m-$207.8m) in the quarter. In terms of local currencies, they rose by 8.2 percent, with an increase of 8.7 percent in the Outdoor & Bags segment, the company's largest one with revenues of SEK 1,682 million (€177.3m-$198.1m). The underlying operating margin reached 25.6 percent in this segment, and it improved to 15.6 percent in the Specialty work gear segment.
In terms of local currencies, Thule's quarterly sales rose by only 0.5 percent in the Americas, due a weak bike market and to two major retail bankruptcies in the U.S., but they went up in Canada and Latin America. The trend in hiking backpacks remained positive, though, and rapid growth was recorded in sport strollers in the region.
Sales jumped by 12.8 percent in Europe and the rest of the World. European sales were driven by the Sport & Cargo Carriers and Other Outdoor & Bags categories. Highly appreciated product launches and continued close cooperation with retailers in Europe helped Thule to grow in Sport & Cargo Carriers, which is its biggest category.
The management noted continued rapid growth in Other Outdoor & Bags, driven by rising awareness for test-winning products in the Active with Kids segment, as well as the company's expanding range of backpacks in Sport & Travel Bags.
For 2017, Thule has introduced an improved suspension system, with a reinforced hip-belt, and a new customizable setting for the shoulder straps in its Guidepost collection, its line of multi-day backpacks. The company has also updated its first generation of backpacks, called Capstone and first launched in 2014, by introducing a MicroAdjust suspension system to customize the fit. The new line also has an improved tensioned mesh back panel for more breathability.