-By Mansi Suryavanshi
INSIGHTS
- Marimekko’s net sales in the first quarter of FY23 reduced by 2% to €35.3 million, principally as a result of lower wholesale sales in Finland and lower licensing revenue in the EMEA area.
- Retail sales in Finland and wholesale sales abroad, however, increased.
- Because of a reduced sales margin and rising fixed expenditures, operating profit decreased to €3.8 million.
Marimekko is a fashion and textile company with headquarters in Helsinki. In the first quarter of fiscal 2023 (FY23), net sales decreased by 2% to €35.3 million from a record-high of €36 million in the prior year. In Europe, the Middle East, and Africa (EMEA), the fall was mostly related to a decline in Finnish wholesale sales and decreased licensing income.
Despite the decline in net sales, the firm reported in a media statement that it had seen a boost from higher retail sales in Finland and higher wholesale sales abroad, which were virtually comparable to the sales of the comparative period.
Finnish wholesale sales decreased by 3% as a result of the weaker overall consumer demand.
Operating profit decreased from €6.6 million in the same quarter previous year to €3.8 million in Q1 FY23. Additionally, the equivalent operating profit came to €3.8 million, or 10.9% of net sales, down from 18.4% the year before. A lower relative sales margin, which was principally undermined by the decline in licensing income, and an increase in fixed expenses as compared to the same time the previous year were the major causes of the operating profit decline.
“Our company’s first-quarter growth was as anticipated. Our sound financial standing enables us to make investments for long-term expansion.
The president and chief executive officer of the company, Tiina Alahuhta-Kasko, stated: “As anticipated, net sales declined owing to a reduction in domestic wholesale sales, which was brought on by a weaker general consumer demand in Finland, as well as reduced licencing revenue in the EMEA area. The domestic retail sales have continued to increase well, with a growth of 12%, demonstrating the great popularity of our brand. Our omnichannel retail sales climbed globally by 9%.
“Our overall wholesale sales declined by 4% as a result of the reduction in domestic wholesale sales, despite an 8% increase in overseas wholesale sales. The same factor also caused a 3% decline in net sales in Finland. Global net sales were virtually in line with those during the comparable period. Despite this projected variation between quarters, we anticipate increased net sales for the entire year in Finland and abroad.
