Rapala VMC Corporation (Group) reported that net sales for the first half (H1) increased 7 percent year-over-year to €134.8 million (~$157 mm) with reported translation exchange rates. With comparable translation exchange rates, net sales were organically up by 11 percent from the comparison period. The operating environment during the first half of the year was said to be affected by geopolitical instability and tariff volatility. Despite continued macroeconomic uncertainty, the North American market reportedly remained resilient for the company, with consumer demand in fishing improving versus the prior year. The Group said the European market remained subdued, with consumer demand further dampened by drought conditions.

Late last week, the Group updated its full year outlook for 2026, with full-year comparable operating profit (excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability) for 2026 now expected to be in the range of €12 million to €14 million, compared to €8.4 million in 2025. The company’s previous outlook issued on March 11, 2026 simply said that Rapala expected full year comparable operating profit to increase from 2025. Editor’s Note: See full coverage of the Group’s increased guidance at the bottom of the page.

“While macroeconomic uncertainty persists amid geopolitical instability and tariff volatility, the company’s strong first-half 2026 performance, healthy inventory levels in the winter fishing category in North America, and a robust innovation pipeline reinforce the company’s confidence in Rapala VMC’s recovery trajectory and underpin the company’s improved full-year outlook,” the company reported.

Rapala VMC Corporation reports in the euro currency (€). First half currency conversions to U.S. dollars were calculated at an average conversion rate of €1.00 = $1.168 as published by Wise Currency Converter.

First Half Region Summary

North America
In the first half of the year, sales in North America increased 12 percent y/y to €77.2 million (~$90 mm) in reported terms, while showing growth of 19 percent with comparable translation exchange.

“Sales in the North American market remained strong in the second quarter, building on the strong performance in the first quarter,” the company said. “Second-quarter replenishment sales demonstrated healthy sell-through of the initial load-in orders shipped at the beginning of the year, as well as the success of new product introductions.”

Growth reportedly remained broad-based across all key brands, led by the flagship Rapala brand.

Europe
First half sales were flattish year-over-year at €44.4 million (~$52 mm) in the Europe region with both reported and comparable exchange rates.

The year reportedly started with an improved outlook and higher pre-season deliveries, but drought and challenging weather conditions apparently weakened consumer demand in parts of continental Europe, impacting replenishment sales in the second quarter. The Group said sales of Rapala and Okuma exceeded the prior-year level, while sales declined for brands with greater exposure to the parts of continental European markets affected by adverse weather conditions.

Rest of the World
Sales in the Rest of the World market increased 9 percent y/y to €13.2 million (~$15 mm) with both comparable translation exchange rates and reporting rates.

Growth in the region was said to be mainly driven by Latin American markets, where positive momentum continued throughout the reporting period and the new Okuma distributorship in Chile contributed incremental sales. Sales in Asian markets reportedly remained challenging and declined, as global trade disputes continued to weigh on consumer sentiment and discretionary spending.

Profitability & Expenses Summary

In the first half of the year, comparable operating profit, which excludes mark-to-market valuations of operative currency derivatives and other items affecting comparability, increased €4.9 million year-over-year to €13.5 million (~$16 mm). Reported operating profit increased €6.7 million from the year-ago H1 period to €15.8 million (~$18 mm) and the items affecting comparability were said to have a positive impact of €2.4 million (positive 0.5) on reported operating profit.

Comparable operating profit margin was 10.0 percent of sales for the first half of the year, compared to 6.9 percent in the 2025 first half period. The improved profitability was said to be primarily driven by increased sales in the open water markets. Overall profitability also benefitted from slightly improve sales margin and from lower operating expense level.

Reported operating profit margin was 11.7 percent of sales for the first half, compared to 7.3 percent in the year-ago period. Reported operating profit includes a negative €0.1 million mark-to-market valuation of operative currency derivatives. Other items affecting comparability, included in the reported operating profit, were €2.4 million. This amount includes mostly gains from the refunding of IEEPA tariffs in the U.S. government. Prior-year other items include the disposal of real estate in Finland, as well as a non-cash currency translation loss relating to the closure of the Russian manufacturing operation.

Total financial (net) expenses were €3.3 million for the first half of the year, compared to €4.9 million in the 2025 first half.

Net interest and other financing expenses were €3.6 million and (net) foreign exchange gains were €0.2 million versus a loss of €1.3 million in the year-ago period.

Net profit for the first half of the year increased by €6.2 million to €8.5 million (~$10 mm), compared to €2.2 million in the year-ago H1 period. EPS was €0.19 per share in H1 2026, compared to €0.02 in H1 2025.

Second Quarter (Q2) Summary

  • Net sales were €65.3 million in the second quarter, up 9 percent y/y from € 60.1 million in Q2 2025. Sales were reportedly up 9 percent from prior-year Q2 period measured with comparable exchange rates.
  • Comparable operating profit was €5.6 million in Q2, compared to €3.0 million in the year-ago Q2 period.
  • Cash flow from operations was €20.5 million in Q2, compared to €15.5 million in the 2025 Q2 period.

Financial Position
Cash flow from operations in the January–June period increased from the previous year and amounted to €16.7 million for the first half, compared to €6.2 million in the year-ago period. Change in net working capital had a negative €1.8 million (2025: negative €4.8) impact on cash flow. Excluding working capital impact, cash flow from operations improved from the previous year and was €18.5 million (2025: €11.0 million), reportedly driven by improved profitability, strong focus on cash flow, as well as the repayment of IEEPA tariffs.

Inventory was €80.1 million at half-end. The change in obsolescence allowance decreased inventory value by €2.3 million. Changes in translation exchange rates increased inventory value by €1.0 million. Organic decrease in inventory was €0.8 million. Inventory turn improved and the composition was said to be “healthy.”

Net cash used in investing activities was €1.6 million in the first half. Capital expenditure was €1.6 million and disposals €0.1 million. Expenditure consisted mainly of maintenance of manufacturing capacity and investments in new products. Prior-year disposals included proceeds from the sale of real estate in Finland.

Liquidity position of the Group was good. Undrawn committed long-term credit facilities amounted to €21.3 million. Commercial papers sold under the commercial paper program amounted to €11.0 million at the end of the reporting period. Gearing ratio increased and equity-to-assets ratio decreased from last year.

The Group’s €91.5 million senior secured term and revolving credit facilities agreement includes financial covenants based on the net debt to EBITDA ratio (leverage ratio), the ratio of net debt to consolidated equity and the minimum liquidity. The financial leverage ratio covenant level for periods Q4/2025 to Q2/2026 is 3.80; for periods Q3/2026 to Q4/2027, 3.50; and from Q1/2028 onwards, 3.20. Covenants are regularly tested, either quarterly or on the last day of each month.

On Q1/2026 and Q2/2026 testing dates, the leverage ratio landed at 3.59 and 2.28, respectively. Calculation of the covenants include customary adjustments mainly related to items affecting comparability and asset disposals, and therefore deviate from the reported figures elsewhere in this report. The Group is currently compliant with all financial covenants and expects to comply with future bank requirements as well. The Group’s liquidity position remains good, and cash and cash equivalents amounted to €28.5 million at June 30, 2026.

The Group equity includes a hybrid loan of €25.0 million issued in November 2025. The accumulated non-recognized interest on hybrid bond were €1.3 million.

2026 Outlook
As reported last week, replenishment demand remained robust in Q2 2026 in the core North American market, following strong initial fill deliveries in Q1 2026 for the open-water season. This has reportedly compensated for softer demand in Europe, where drought conditions and weaker consumer spending have weighed on market activity.

“While macroeconomic uncertainty persists amid geopolitical instability and tariff volatility, the strong first-half 2026 performance, healthy inventory levels in the winter fishing category in North America, and a robust innovation pipeline reinforce the confidence in Rapala VMC’s recovery trajectory and underpin the Group’s improved full-year outlook,” the Group stated.

“Our guidance reflects current market conditions but remains subject to potential trade-related disruptions, including tariffs and regulatory changes, which may impact demand and cost structures.”

Consequently, the Group revised the outlook and expects 2026 full year comparable operating profit (excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability) to be in the range of €12 million to €14 million.

Image, data and tables courtesy Rapala VMC Corporation

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