New Wave Group (NWG), the Swedish-based owner of Ahead, Auclair, Craft, Cutter & Buck, and Tenson AB, reported that fourth-quarter net sales declined 3 percent to SEK 2,735.9 million from SEK 2,815.1 million in Q4 last year.
Both sales channels reportedly decreased net sales, with Promo up by 1 percent and Retail by 6 percent.
The Corporate segment was said to be at the same level as last year, while Sports & Leisure and Gifts & Home Furnishings, which are more dependent on the retail trade, decreased both in terms of net sales and operating results.
Segment Results
The Corporate segment was flat for the quarter at SEK 1,348.1 million, despite reduced prices for basic products but increased its operating profit.
The Sports & Leisure segment, which includes the active lifestyle brands owned by NWG, declined 7 percent to SEK 759.3 million. The acquired operation of Tenson AB impacted SEK 9.2 million percent on the sales growth. Segment sales increased in all regions except Nordic(x-Sweden) and Other Countries.
Regional Results
U.S. net sales were SEK 613.3 million, down 1 percent from the prior-year quarter. The Sports & Leisure segment is the dominant business in the U.S. market. Sales were up slightly in the segment to SEK 501.4 million. Corporate and Gifts & Home furnishings both declined on a small business. Sports & Leisure is 83 percent of the U.S. business.
Sweden sales were also down 1 percent for the quarter to SEK 629.1 million. Sports & Leisure, which is 35.9 percent of the region’s business, grew 3.2 percent to SEK 225.7 million, attributable in part to the acquisition of the Swedish outdoor gear company Tenson AB.
Central Europe region revenues increased 2 percent in the quarter to SEK 647.5 million, which was said to be mainly related to last year’s acquisitions in the Corporate segment. Sports & Leisure declined 6 percent to SEK 116.4 million. Sports & Leisure only represented 18.0 percent of total company sales in the region.
The Nordic region, excluding Sweden, decreased 7 percent year-over-year to SEK 302.4 million, with declines across all segments. Sports & Leisure, which was 47.8 percent of sales in the region, declined 8.1 percent.
Southern Europe net sales declined 4 percent to SEK 375.2 million, with the vast majority of the decline coming from the Sports & Leisure segment, which only represented 7.3 percent of total sales in Q4, compared to 10.9 percent of sales in the prior-year quarter. Sports & Leisure segment sales fell 35.5 percent in the quarter.
Other countries fell 18 percent, primarily attributable a sharp decline in the Sports & Leisure segment. Corporate sales improved in the quarter. Sports & Leisure sales fell 45.7 percent in the region.
While operating profit was down for the quarter, CEO Torsten Jansson was upbeat about the result considering the sales decline.
“I am very satisfied with the fact that we delivered SEK 518.7 million in operating results, even if it meant a reduction in the quarter of SEK 28.5 million,” he said. “It is still the second-highest quarterly profit in our history and our operating margin amounted to 19.0 percent.
