Thule Q2 sales beat on new launches; stock up 3%

Investing.com -- Thule Group on Tuesday reported a 9.8% increase in second-quarter net sales to SEK 3.40 billion, supported by product launches and the Quad Lock acquisition, sending its shares up over 3%. 

Organic growth was 1.5%, with currency effects reducing growth by 5.9%. The result was 3% above consensus, according to Jefferies.

Regionally, sales in Europe rose 7% to SEK 2.37 billion, with organic growth of 3.5%.  North America posted a 9.7% sales increase to SEK 823 million, but organic sales declined 3.3%. 

The Rest of World segment saw sales rise 58.5% to SEK 206 million, while organic sales declined 6.9%.

Gross income rose to SEK 1.58 billion from SEK 1.38 billion, with the gross margin improving to 46.3% from 44.4%. 

Quad Lock, which operates at a higher margin, was cited as a key driver. Adjusted operating income was SEK 734 million, flat year-over-year. 

The adjusted operating margin declined to 21.6% from 23.6% due to higher front-loaded product development costs. 

Operating income, which included SEK 31 million in restructuring charges in North America, totaled SEK 703 million, down from SEK 732 million.

Net income fell 8.3% to SEK 512 million, with earnings per share at SEK 4.75, down from SEK 5.28. 

Cash flow from operating activities totaled SEK 744 million, compared with SEK 879 million a year earlier.

Product categories showed mixed performance. Sport & Cargo Carriers, representing 56% of sales, grew 3% organically. 

RV Products accounted for 15% of sales and rose 4% organically. Bags & Mounts, which doubled its share to 17% following the Quad Lock acquisition, declined 21% organically. Active with Kids & Dogs, making up 12% of sales, increased 1% organically.

In North America, sales of bike carriers improved due to the introduction of region-specific products. 

However, overall U.S. demand remained weak. The company noted that restructuring efforts and new product launches showed early signs of progress.

“However, the US remains the key swing factor: while Q2 showed signs of stabilization, a sustained recovery in consumer demand and retailer restocking is critical to unlocking the full earnings potential,” said analysts at Jefferies in a note.

Thule continued its investment program with a SEK 450 million logistics expansion project at its Huta, Poland, facility. 

The site is expected to be operational in 2027 and generate annual savings of SEK 100 million.

Net debt rose to SEK 4.07 billion, up from SEK 1.75 billion a year earlier. The equity ratio fell to 47.9% from 58.6%, and the pro forma leverage ratio increased to 2 from 1.

A dividend of SEK 8.30 per share, totaling SEK 895 million, was announced, with half distributed in May and the remainder scheduled for October.

The company stated that while performance in Europe remained stable and product launches supported growth, a recovery in North America remains critical for broader earnings improvement.