Thule said the year started off well with first quarter sales increasing, good profitability and new products have been very well received. Still, only one of the company’s four major product categories posted an increase for the quarter as the bike business had an easier comp against a weak first quarter last year.

Sales in the first quarter increased 8.8 percent (+8.0 percent constant currency) to SEK 2.42 billion, compared to SEK 2.23 billion in the year-ago comparative period. Company President and CEO Mattias Ankarberg noted in a letter to investors that the market continued to be tough with cautious retailers and consumers.

“New Thule products continue to drive sales growth also in a challenging market,” Ankarberg added. “As expected, sales for bike-related products performed well, while sales decreased in RV Products where the industry is going through a weaker period.” Ankarberg said that customers’ inventory build-up in RV Products business ahead of the spring season meant that the sales decrease was limited to a decline of 5 percent. He also indicated that sales “increased clearly” in the Juvenile & Pet product category, driven by well-received product launches.

Europe and Rest of World Region
In the Europe and Rest of World (RoW) region, first quarter net sales increased 10.4 percent (+9.4 percent currency-adjusted) to SEK 1.875 billion, compared to SEK 1.698 billion in the year-ago period.

The company said the 2023 Q1 period was weaker due to a sharp slowdown in sales of bike-related products, new product launches in Juvenile & Pet sales, and Thule-branded products in the Packs, Bags & Luggage category. Thule said in its Q1 report that that the Thule-branded products in the Packs, Bags & Luggage category continue to trend positively and more than compensated for the sales decline of the legacy products. Sales reportedly declined in the RV Products category.

“We continue to work at a high pace opening own sales via thule.com in an increasing number of countries, and the launch in the year’s first new market Czech Republic immediately contributed to growth in the DTC channel,” Ankarberg detailed.

Other markets that reportedly performed “particularly well” included Germany. Austria, Switzerland and the Nordic countries.

Americas Region
Net sales in the Americas region grew 3.2 percent (+3.4 percent currency-adjusted) to SEK 545 million in Q1, compared to SEK 528 million in the 2023 Q1 period. The recovery of the cycling market was credited with part of the growth in the market as bike-related products sales increased in the region. The Juvenile & Pet category also reportedly showed “good growth,” driven by new product launches. On the down side, Packs, Bags & Luggage category declined due to “significantly lower” sales of legacy products that the company said it is phasing out gradually.

Latin America markets reported growth for the period while Noth American was flattish to the prior-year period.

Category Sales

  • Sports & Cargo Carriers, which accounted for 56 percent of total Thule sales, increased 16 percent currency-adjusted in the quarter. Bike carriers, the largest sub-category here, accounted for the majority of the increase, but the other sub-cats also permed well for the period, according the report.
  • RV Products declined 5 percent currency-adjusted in the quarter. The category accounted for 22 percent of total Thule sales for the period.
  • Juvenile & Pet represented 13 percent of total Thule sales, declined 3 percent year-over-year in currency-adjusted terms. The increase in sales of Strollers were said to be “strongly driven” by the upgraded version of the Urban Glide 3 best seller. Multi-Sport and Bike Trailers both reportedly trended positively.
  • Packs, Bags & Luggage which accounted for 9 percent of total Thule sales, declined 3 percent year-over-year in currency-adjusted terms. The company said sales of Thule-branded product have trended well, driven by product launches and increased travel. Thule said the decline is sales for the period was the the result of legacy products that are being phased out.

The gross margin for the first quarter amounted to 41.2 percent of net sales, flat to the 2023 Q1 period, impacted by a positive product mix and increased volume, offset by “slightly higher” production costs.

Operating income, or EBIT, was SEK 412 million in Q1, a 7.7 percent increase compared to the prior-year Q1 period. The EBIT margin was said to be 17.0 percent of net sales, down 20 basis points from last year’s level despite this year’s record number of product launches that resulted in higher costs, primarily during the first half of the year.

Net income increased 9.1 percent year-over-year for the first quarter to SEK 300 million, or SEK 2.83 per share, compared to SEK 275 million, or SEK 2.63 per share, in the 2023 first quarter.

Image courtesy Thule Group