Thule Q1 2025 slides: Quad Lock acquisition boosts revenue amid North American weakness

Introduction & Market Context

Thule Group AB (STO:THULE) shares plunged 12.13% to SEK 230.2 on April 29, 2025, after the outdoor equipment maker released its first-quarter results showing mixed performance. While total revenue grew 10% year-over-year to SEK 2,662 million, organic sales declined 3%, with North America particularly weak at -13% organic growth.

The stock’s sharp decline reflects investor concerns about the company’s performance in key markets and reduced profitability, with shares now trading near their 52-week low of SEK 224.4, down over 27% in the past six months.

As shown in the following financial highlights slide, Thule faces challenging market conditions despite achieving record gross margins:

Quarterly Performance Highlights

Thule’s Q1 2025 results revealed significant contrasts across financial metrics. While revenue grew 10% to SEK 2,662 million, this growth was primarily driven by the Quad Lock acquisition completed in Q4 2024, as organic sales declined 3%.

The company achieved an all-time high gross margin of 44.8% (up from 41.2% in Q1 2024), attributed to the Quad Lock acquisition, price increases, improved product mix, and higher production volumes. However, EBIT fell to SEK 401 million from SEK 412 million in the prior year, with EBIT margin declining to 15.1% from 17.0%, which the company attributed to earlier product launches ahead of the high season.

The following chart illustrates Thule’s long-term revenue and EBIT performance:

Cash flow from operations turned negative at SEK -334 million compared to positive SEK 89 million in Q1 2024, which the company described as a return to historical seasonal patterns after exceptional inventory reductions in the previous year. Thule maintains it is on track to reduce inventory by an additional SEK 200 million in 2025.

The company’s sales mix has shifted significantly, with Sport & Cargo Carriers now representing 50% of sales (down from 56%), while Bags & Mounts doubled to 18% (from 9%) largely due to the Quad Lock acquisition. Geographically, Europe accounts for 71% of sales, North America 21%, and Rest of World 8%.

Strategic Initiatives

Thule is implementing several strategic changes to address challenges, particularly in North America. The company has reorganized its North American sales operations, closing a satellite office that came with the 2007 Case Logic acquisition and consolidating operations at its regional headquarters in Connecticut, co-located with one of its two US factories.

CEO Mattias Ankarberg emphasized these changes during the earnings call, stating: "We have made changes in North America to strengthen our competitiveness," while acknowledging that "the consumer is clearly not in a great place in the U.S. right now."

The company is refocusing its North American strategy on bike carriers and pick-up truck accessories, while abandoning its North American car seat project. Thule plans to implement price increases effective June 1, 2025, to offset tariff impacts.

The following slide outlines Thule’s strategic focus for 2025:

The Quad Lock acquisition, completed in Q4 2024, has proven successful in its first full quarter with Thule, delivering over 20% sales growth at maintained high margins. The acquisition has significantly strengthened Thule’s position in the performance phone mounts category.

Thule continues to emphasize product innovation, receiving seven new iF Design awards in 2025 for products including the Thule ReVert vertical hitch bike rack, Thule Easyfold 3 bike carrier, and Thule Aion bag collection.

Forward-Looking Statements

Despite current challenges, Thule maintains its long-term target of SEK 20 billion in sales and a 20% EBIT margin by 2030. For 2025, the company is focusing on product development with an increased emphasis on attractive segments in North America, scaling up newly launched dog transportation and child car seat categories in Europe, and growing its acquired performance phone mounts business.

The company plans to continue its high pace of product launches in 2025, with several new products already introduced and more planned ahead of the high season:

Thule expects the weak North American market and cautious consumer behavior globally to continue throughout 2025. However, management believes the company is well-positioned due to its global market leadership in key categories, premium product positioning targeting enthusiast consumers, manufacturing facilities in both Europe and the USA, and growth from new product categories.

The company’s focus on supply chain efficiency aims to fund growth initiatives, with a target to reduce inventory by an additional SEK 200 million in 2025, which executives confirmed is on track despite the seasonal increase in working capital during Q1.

As Thule enters its high season, management expressed confidence in its product lineup and operational readiness, though investors clearly remain cautious about the company’s ability to overcome market headwinds, particularly in North America, as reflected in the sharp stock decline following the earnings release.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.