Fiskars: Q3 mix better-than-feared – own sales channels performing well - Nordea

Fiskars’ Q3 adjusted EBIT of EUR 17.9m came slightly above preliminary figures released on 12 October (EUR 17m). Net sales of EUR 241m were down 18% y/y (pre-released). Q3 gross margin of 47.1% came above consensus expectations of 46.2%. Direct-to-consumer sales were up 6% y/y driven by both strong performance in own ecommerce and stable development in own retail network. On divisional level, all operating segments beat our estimates while Other missed clearly. Hence, we view result mix as strong. Q3 operating cash flow improved clearly and was EUR 68m (EUR -46m a year ago) supported by EUR 23m decline in inventories q/q. Net debt/LTM EBITDA was 2.2x (1.7x in 2022). There were EUR -4.2m of items affecting comparability on EBIT level. Fiskars lowered its guidance on 12 October and expects adjusted EBIT of EUR 100-120m in 2023. Pre-Q3 consensus has been expecting EUR 107m adjusted EBIT. Initially, we do not expect large consensus revisions owing to profit warning and pre-released figures on 12 October. However, good divisional mix, improving gross margins and strong cash flow can give support for 2024E-25E estimates, we believe.