New Wave Group AB, the parent of Craft and Cutter & Buck, reported profits rose 44.8 percent in the first quarter ended March 31 on a 20 percent sales gain.

Based in Kungälv, Sweden, New Wave Group owns a number of apparel brands, including Craft, Cutter & Buck, Ahead, Orrefors, and Kosta Boda.

First-Quarter Highlights

  • Net sales of SEK 2.14 billion, 20 percent higher than in 2022 (SEK 1.77 billion). Currency changes affected net sales positively by 6 percent and acquired business by 9 percent;
  • Operating results amounted to SEK 313.5 (209.1) million;
  • Results for the period amounted to SEK 222.2 (153.5) million;
  • Earnings per share amounted to SEK 3.35 (2.31);
  • Cash flow from operating activities amounted to SEK -193.1 (5.2) million;
  • The equity ratio amounted to 56.3 (61.9) percent; and
  • The net debt-to-equity ratio amounted to 42.0 (22.9) percent.

Torsten Jansson, founder and CEO of New Wave Group AB, said, “We start 2023 in an incredibly impressive way. Both the first quarters of 2021 and 2022 were record highs. Therefore we were comparing against very strong numbers and we were still able to outperform them. 

“Operating results increased by SEK 104.4 million from SEK 209.1 million to SEK 313.5 million or by 50 percent, which gives an operating margin of 14.7 percent (11.8 percent) in what is always the weakest quarter of the year. Continued good gross profit, increased sales, good cost control, and efficiency improvements resulted in a very positive outcome.

“Of our two sales channels, promo grew by 22 percent and retail by 17 percent. Of our three segments, Corporate grew by 24 percent, Sports & Leisure by 23 percent, while Gifts & Home Furnishings decreased by 6 percent.”

Rolling 12 Months
Jansson said, “On a rolling full-year basis, net sales now amount to SEK 9.204.2 million, and it is a significant accomplishment to break the 9 billion barriers for the first time and quickly approach the interim goal of SEK 10 billion.

“Operating result amounts to SEK 1,609.5 million and it is the first time it exceeds SEK 1.6 billion. The operating margin continued to improve and is now 17.5 percent.”

Cash Flow And Balance Sheet
Jansson said, “We continue to have a very strong balance sheet. For the first time, equity exceeds SEK 6 billion (SEK 6,106.7 million), and our equity ratio amounts to 56.3 percent.

“We have increased our debt slightly because we deliberately built up the inventory, and we are increasing sales and thus tying up more capital in accounts receivable. We also acquired B.T.C. Activewear last year, and we still have room for more acquisitions.”

The Future
Jansson said, “It is always difficult to assess the short-term perspective, but I know that we are strong in almost all areas. The investments we made in the past have really yielded good results, both in increased sales and in a very good profit development.

“We have a lot of growth left in already developed products, such as in Craft shoes and Craft Teamwear, where we have only seen the beginning. There are also great opportunities for continued profitable growth within Cutter & Buck and several of our brands within promo and professional clothing.

“We will, as I previously wrote, increase the pace of product development, marketing, and introduction of existing products/brands in more countries. This was already initiated during the first quarter. As it currently stands, current revenue increases are able to offset those costs without having any major negative impact on our results.

“So, all in all, my employees and I see the future brightly, and we have many years of profitable growth ahead of us!”

 Photo courtesy Cutter & Buck