New Wave Group (NWG), the Swedish-based owner of Ahead, Auclair, Craft, Cutter & Buck, and Tenson AB, reported that net sales increased 8.3 percent (+3.6 percent currency-neutral) to SEK 2.39 billion from SEK 2.31 billion in Q3 last year. The reported increase was based on 4.1 percent growth tallied in local currencies, while acquisitions contributed an additional 4.2 percent to the quarter’s results. The company said the quarter is continuously negatively affected by currency fluctuations, with the Swedish krona strengthening against other currencies within the Group compared to the third quarter last year.

The company also continues its acquisition spree as it closed of its deal to acquire 100 percent of the shares in Austrian textile wholesaler Cotton Classics Handels GmbH.

“The market remains weak, but we are noticing increased optimism among part of customer base, suggesting a potential turnaround, although the timing remains uncertain,” commented company CEO Torsten Jansson in a letter to investors.

Sales by Operating Segment and Sales Channel
The Group’s products are distributed through two sales channels, Promo and Retail.  Most brands are offered on both channels.

  • Promo channel sales increased 7.2 percent to SEK 1.49 billion in the third quarter.
  • Retail channel sales decreased by 1.9 percent to SEK 905 million.

Both channels were said to be negatively impacted by currency fluctuations during the quarter with a total impact of 4.8 percent.

For the nine-month year-to-date period as a whole, approximately two-thirds of the sales have been made through the Promo channel, while the remaining one-third was generated through the Retail channel.

The company also operates across three operating segments: Corporate, Sports & Leisure, and Gifts & Home Furnishings, with Corporate segment accounting for 50 percent of the Group’s revenue, Sports & Leisure accounts for 42 percent, and Gifts & Home Furnishings for the remaining 8 percent of the total.

  • Corporate generated revenue of SEK 1.14 billion, compared to SEK 1.08 billion in Q3 2024.
  • Sports & Leisure produced SEK 1.05 billion (compared to SEK 1.03 billion in Q3 2024).
  • Gifts & Home Furnishings delivered SEK 205 million in the quarter, compared to SEK 203 million in the year-ago quarter.

The trading operations in Asia, which are characterized by few but large orders, making turnover volatile, contributed positively with a total of SEK 126 million in Q3, compared to SEK 122 million in Q3 2024.

Regional Results
New Wave Group operates in 25 countries, with sales primarily in Europe and North America. As of 2025, Benelux (the Netherlands and Belgium) is reported as a separate region. These countries were previously included in regions referred to as Central Europe and Southern Europe, which are now reported as Rest of Europe and include England, France, Ireland, Italy, Poland, Switzerland, Spain, Germany, Czech Republic and Austria. Canada and the U.S. have been included in North America starting in 2025.

Sales for the quarter were said to be negatively affected by currency translation effects in all regions except Sweden, with North America having the most impact at approximately – 9 percent. Adjusted for currency effects, growth has been observed in all geographical markets.

Other Operating Income and Expenses
Third quarter operating expenses include a non-recurring charge of SEK 66 million for the repayment of loans previously forgiven under the Paycheck Protection Program (PPP-loan). The loans were granted to the Group’s U.S. subsidiary during the COVID-19 pandemic. The expense also includes interest, damages, and other costs relating to the loan. Moreover, other operating income and other operating expenses primarily relate to foreign exchange gains and losses. At the end of the period, the Swedish krona’s closing rate was slightly lower than at the end of June 2025, resulting in a minor negative translation effect during the quarter.

Net foreign exchange effects on other incomes and expenses for the quarter amounted to negative SEK  1 million, compared to a positive SEK  3 million in Q3 last year. The net total of other operating income and other operating expenses for the quarter was negative SEK 60 million, compared to positive SEK 10 million in the year-ago quarter.

Gross Profit and Gross Profit Margin
The gross profit and gross profit margin are the result of many factors, both internal and external, and are primarily influenced by the decisions made by the New Wave Group based on the strategy to achieve the best combination of quality, price, service level and sustainability. The gross profit for the third quarter was approximately 6.0 percent higher compared to the same quarter last year and amounted to SEK 1,196 million (1,128), corresponding to a gross profit margin of 50.0 percent (48.8) in converted currency. The product mix and a lower share of trading positively impact the quarter’s margin, while acquisitions reduce the margin.

Excluding the effect of acquisitions, the comparable gross margin for the quarter was 51.1 percent.

Selling and Administrative Expenses, Depreciation
Compared to the same period last year, external costs increased by SEK 40 million or 10 percent and amounted to SEK 435 million (396). During 2024, an adjustment between depreciation and right-of-use assets was executed, which resulted in a non-recurring reduction in external costs of SEK 18 million. This resulted in an equivalent increase in depreciation costs as well as interest expenses with SEK 13 million, respectively SEK 6 million. Excluding the impact of last year’s lease adjustments, costs related to depreciation and interest grew with SEK 22 million, as a result of enhanced IT costs due to the ongoing implementation of a new ERP system, in total approximately SEK 12 million for the quarter. A royalty fee for The Ryder Cup, together with a one-time remuneration of SEK 4 million is also incorporated into the total of external costs.

Personnel costs increased by SEK 19 million during the quarter and amounted to SEK 361 million (342). One third of the increase is attributed to acquisitions, the remaining part is due to new investments in sales-driven functions and IT infrastructure. The average number of employees increased by an additional 73, compared to the same period last year and amounted to a total of 2,513 (2,440) on the 30th of September. The change is primarily attributable to recruitment within sales-oriented functions and IT, as well as acquisitions. Consequently, because of new investments primarily in new warehouses, the number of employees engaged in those functions has increased. Out of the Group’s total workforce, 519 (523) are employed in production. The production operations within New Wave Group are associated with AHEAD (embroidery), Cutter & Buck (embroidery), Kosta Boda, Orrefors, Seger, Termo and Toppoint.

Currency fluctuations reduced the above-mentioned costs by a total of SEK 37 million (–20).

Depreciation and amortization wee said to be in line with the third quarter last year, SEK 86 million (86). Since the prior year’s depreciation was impacted by a non-recurring effect, the quarterly increase amounts to about SEK 6 million. The increase is related to depreciation of right-of-use assets linked to leasing and investments made in automation within the Group’s warehouse operations.

Operating Profit and Operating Margin
New Wave Group said it aims to achieve an operating margin of 20 percent annually over a business cycle.

Operating profit for the third quarter amounted to SEK 253 million (313), corresponding to an operating margin of 10.6 percent (13.6). The operating profit for the quarter is negatively impacted by the provision totaling SEK 66 million, established due to the U.S. Department of Justice investigation of previous forgiven PPP loans.

Acquisitions account for a positive contribution of just below SEK 14 million.

Finance Net and Taxes
The finance net during the quarter decreased and amounted to SEK –28 million (–37). As noted earlier, the prior year included a non-recurring effect of SEK 6 million concerning adjustments to right-of-use agreements, limiting comparability. Tax on the quarterly result amounted to SEK –59 million (–72) and for the interim period SEK – 153 million (–163) of which the current tax totals SEK –161 million (–149) and deferred tax totals SEK 9 (–13). The effective tax rate was 26.3 percent (26.1) for the quarter and to 24.3 percent (23.3) for the interim period. The higher tax rate is primarily a result of the non-deductible cost related to the settlement in the U.S.

Result for the Period
Profits for the quarter amounted to SEK 166 million (204) and earnings per share to SEK 1.25 per share (1.54).

Inventory and Capital Tied-up
Adjusted for currency, inventory increased by 10.4 percent or SEK 533 million since the beginning of the year and amounted to SEK 5,657 (5,124) million. The increase stems from ongoing warehouse expansion in parallel with the acquisitions. In local currency, excluding acquisitions, the inventory value increased by 12.0 percent, with an additional 4.9 percent attributable to acquisitions. Fluctuations in currency result in a lower inventory value by SEK – 332 million or –6.5 percent. Inventory turnover is in line with the same period last year and amounted to 1.0 times (0.9), which aligns with the Group’s investments in new establishments, including in Canada and the USA. The inventory compositions are assessed as good.

Liquidity and Financing
The New Wave Group’s liquidity remains strong. As of September 30, 2025, cash and cash equivalents amounted to SEK 571 million, comparable to SEK 546 million at the previous year-end and SEK 475 million at the same time last year. In addition, the Group has unused credit facilities of SEK 440 million, in comparison to SEK 971 million in the corresponding period of the prior year. The total liquidity buffer, i.e. the sum of cash and unused credit facilities, amounted to SEK 1,011 million (1,446).

Net debt increased since the beginning of the year and amounted to SEK 2,942 million (1,804). The increase is primarily related to higher borrowing from credit institutions due to ongoing investments as well as acquisitions. The net debt-to-equity ratio and net debt-to-working capital ratio amounted to 44 percent (29) and 52 percent (36), respectively.

During the year, significant fluctuations in the currency markets have occurred, with the Swedish krona strengthening against other currencies. This has negatively affected the translation of the Group’s equity with a total of SEK 513 million, reducing the equity ratio equivalent to 1.8 percentage points. The equity ratio amounted to 52.0 percent, compared to 60.7 percent at the same time last year.

During the second quarter, the annual dividend of SEK 464 million (464) was deducted from equity, and the first of two payments to shareholders, amounting to SEK 232 million (232), was executed. The remaining dividend payment will be made in the fourth quarter.

As of September 30, the Group’s approved credit facility amounted to SEK 3.07 billion (2,688), of which SEK 2.60 billion matures in December 2026, SEK 87 million matures in August 2027 and SEK 131 million has a term extending until December 2030. The remaining SEK 250 million has a maturity ranging from three months to four years. The credit facility has a limited amount and is contingent upon the value of certain underlying assets. The financing agreement stipulates that key financial ratios (covenants) must be met to maintain the credit limit. As of 30 September 2025, the group’s financial ratios (covenants) were fulfilled.

Photo courtesy New Wave Group