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Investing.com -- Shares of Thule Group AB (ST:THULE) fell by 13% as the company reported a decline in organic sales, particularly in North America, despite overall net sales increasing by 10% year-over-year (YoY).
The Swedish outdoor and transportation products company announced its first quarter results, which showed a YoY drop in EBIT of 2.5%, falling short of consensus estimates by 10%.
The company’s net sales rose to SEK 1.68 billion, a 10% increase compared to the same quarter last year, but experienced a 2.9% organic decline, missing the Modular Finance consensus by 2%. The decline was driven by a 13% organic sales drop in the North American market.
Although Thule saw a gross margin improvement to 44.8% from 41.2% in the first quarter of the previous year, increased costs associated with product launches impacted profitability.
Thule has taken steps to address its challenges in North America, including establishing a new sales organization and implementing efficiency measures. The company is also raising prices to offset the impact of tariffs and is investing in growing market niches where it has strong positions.
Regionally, sales figures varied with Europe reporting a modest organic growth of 0.4%, while the Americas and the rest of the world (ROW) saw organic declines of 12.6% and 9.3% respectively.
Despite these challenges, the company’s gross income improved, reaching SEK 1.19 billion, a 19.7% increase YoY, with a gross margin of 44.8%.
The adjusted EBIT for Thule stood at SEK 401 million with a margin of 15.1%, down from 17.0% in the same quarter of the previous year.