Thule reported net sales for the third quarter jumped 44.9 percent to SEK 2,436 million ($278 mm). Adjusted for exchange rate fluctuations, sales rose 52.4 percent. Strength in bike products, rooftop tents and strollers drove a 36 percent gain in the Americas region.

Thule said it saw a strong recovery in sales during the quarter and a large share of the sales lost during the spring season due to the outbreak of the coronavirus were shifted to the summer and extended the peak season.

In Region Europe & ROW, net sales totaled SEK 1,827 million, up 53.8 percent, and 58.9 percent after currency adjustments. Net sales in Region Americas amounted to SEK 609 million, up 23.3 percent and 35.7 percent after currency adjustment year-on-year.

Operating income overall amounted to SEK 596 million, increasing more than two-fold from SEK 249 million a year ago. Underlying EBIT amounted to SEK 596 million against  SEK 274 million, corresponding to a margin of 24.5 percent compared with 16.3 percent a year ago. Adjusted for exchange rate fluctuations, the operating margin rose 7.3 percentage points.

Net income grew to SEK 449 million from SEK 181 million a  year ago.

Cash flow from operating activities totaled SEK 764 million, up from SEK 571 million. Earnings per share before dilution amounted to SEK 4.32 versus SEK 1.75 a year ago.

Comments from Magnus Welander, Thule’s CEO and president follows:

I am very satisfied that we delivered currency-adjusted growth of 52 percent for the third quarter of the year, which means that we achieved a currency-adjusted sales increase of 7 percent for the first nine months. The growth during the quarter confirms our capacity to manage large fluctuations in demand flexibly and efficiently. Driven by the strong sales growth, a favorable gross margin and an efficient organization, we delivered an underlying EBIT margin of 24.5 percent (16.3) for the quarter. Cash flow was also strong for the quarter at SEK 764m (571). As I communicated in connection with the second-quarter report, we hoped to be able to recover the lost spring season during the summer and to continue to ride the strong global bike trend that commenced during June. This was precisely what happened during the third quarter. The strong profitability during the quarter also enabled us to reach an EBIT-margin of 19.1 percent for the trailing 12-month period. This is in line with where we would have expected to be by the end of this year, prior to the situation in the spring.

Region Europe & ROW – Spring and Summer Became A Short Concentrated Season
During the quarter, sales in the region rose 59 percent after currency adjustment, which meant that we posted growth of 9 percent after nine months. As was the case at the end of the second quarter, the trend in the third quarter was highly positive in all European markets. Our broad and market-leading portfolio of products in the bike category (bike racks, bike trailers and child bike seats), gained strong traction from a very positive bike trend. In addition, we also saw within our other products for car transport how the spring lockdown led to pent-up demand for our products during the summer. Accessories for RVs performed well since many consumers chose this type of vacation with the possibility of living in their own, more private sphere. Stroller sales also grew during the quarter. The bag category, however, trended negatively due to reduced travel and also lower sales of Back to Campus bags as a result of school closures in markets in Europe and Asia.

Region Americas – Bike Products, Rooftop Tents And Strollers The Winners
In Region Americas, sales rose 36 percent in the quarter after currency adjustment and sales growth was 1 percent for the first nine months of the year. As in Europe, the growth was mainly driven by a very healthy level of demand for bicycle products. In addition, stroller sales were highly positive, as were sales of rooftop tents. Bag sales in these regions were also weaker than in the preceding year. Sales in Latin America were weak during the quarter due to the escalating pandemic situation in these markets and consequent caution among our distributors.

Short-term Uncertainty Remains, But The Long-Term Trends Are Positive
From a short-term view, several challenges remain, including uncertainty regarding the scope of new market lockdowns in a number of countries. We believe that the strong trend in activities close to the home will continue in the bike and RV sectors, but it is worth noting that, for the fourth quarter, we have greater seasonal exposure to categories that have been negatively affected by the market realities during the pandemic to date. The positive developments in recent months have made us even more secure in the underlying market trends that are positive for us and, therefore, our long-term focus on offering fantastic products for people who want to be active. In line with this, we will continue with our ambitious plans with major investments in product development and our production and distribution structure in the next year. I want to conclude by thanking all the colleagues at Thule Group, who have shown fantastic drive and enormous flexibility during a very challenging period.

Photo courtesy Thule