Thule Inc. reported that sales in the first quarter amounted to SEK1.6 billion, representing an increase of 15.9 percent.

Adjusted for exchange rate fluctuations, net sales for the Group rose 12.3 percent.

In the Outdoor & Bags segment, net sales totaled SEK1.5 billion, corresponding to an increase of 17.2 percent and 13.8 percent after currency adjustments.

In Region Europe & ROW, net sales increased 17.0 percent after currency adjustment, while Region Americas’ sales grew 6.8 percent after currency adjustments, although the region continues to be negatively impacted by weaker sales in the Bags for Electronic Devices product category.

In the Specialty segment, net sales totaled SEK74 million, a decline of 7.6 percent and 12.4 percent after currency adjustments. The segment now only comprises the toolboxes for pick-up trucks operation, which is to be divested. The two smaller product groups that were formerly included in the Specialty segment, racks for pick-up trucks and accessories for pick-up trucks, which are not being divested, are now included in the Outdoor&Bags segment under Region Americas. Comparative figures have been recalculated retroactively

Operating income totaled SEK280 million, up 20.9 percent.Changes in exchange rates had an overall positive impact of SEK 11m on underlying EBIT, compared with the first quarter of 2016. After currency adjustment, Thule achieved a year-on-year margin improvement of 0.3 percentage points in the quarter, compared with the year-earlier period. The improvement was achieved through volume growth as well as the efficiency initiatives implemented in inventory and logistics.

Underlying EBIT amounted to SEK280 million, corresponding to an increase of 19.4 percent and a margin of 17.5 percent against 17.0 percent in the same period a year ago. After adjustment for exchange rate fluctuations, underlying EBIT rose 14.0 percent and the margin improved 0.3 percentage points.

Net income amounted to SEK203 million, up 20.1 percent versus the year-ago period.

In his comments, Magnus Welander,CEO and president, stated:

Very strong first quarter

2017 started well, with sales growth of 14 percent (after currency adjustment) for our Outdoor&Bags operations and continued favorable profitability. Region Europe & ROW once again proved to be a strong driving force in terms of growth, surpassing our expectations with sales growth of 17 percent (after currency adjustment). I am also pleased that Region Americas delivered growth of 7 percent (after currency adjustment), despite a continued challenging market situation for retailers in the U.S.

Our EBIT improved 14 percent (after currency adjustment), despite global launches within suitcases and multisport trailers as well as major investments in product development. This shows that we continue to maintain a good balance between profitability and a focus on driving long-term growth.

Thule products with a winning design

We have always been proud of our products, with their smart solutions and outstanding design. During the first quarter, we once again had reason to celebrate our winning design skills. Our Thule Chariot Sport trailers and Thule Yepp Nexxt child bike seats won two of the 75 highly prestigious IF Product Design Gold Awards, considered by many to be the Oscars of the design world.

Growth in Region Americas

Sales in Region Americas increased 7 percent (after currency adjustment) during the quarter, which was particularly gratifying given that sports and outdoor retailers in the U.S. continue to face a relatively shaky market.

Sport&Cargo Carriers performed well in all product groups. Growth was driven by successful product launches, a strong winter season and the fact that retailers entered the season with a better balance in terms of their opening inventory levels. Other Outdoor&Bags delivered another quarter of strong growth, driven by our child-related products. Deliveries from our new distribution center in the Western U.S. began during the quarter, which means that we have now successfully and seamlessly completed the most important steps in the reorganization of our distribution structure.

Europe bolstered by a hot RV market

Sales in Region Europe & ROW increased an impressive 17 percent (after currency adjustment) during the quarter.

The trend in the European motorhome and caravan market was highly positive during the period and we were able to respond to the rapid growth in volumes driven by a booming market and our continued increase in market shares. In our opinion, it is unlikely that the market will continue to develop at the same pace as the year progresses, but we feel
confident that we will continue to capture market shares with our strong product offering.

Sport& Cargo Carriers continued to perform extremely well in the region and the large-scale launch of a new family of Thule Chariot multisport trailers garnered an even better reception than anticipated.

The introduction of the Thule Subterra family of luggage for the modern business traveler was well received in the market and sales for the first few months were promising. Bags for Electronic Devices also delivered a number of highlights during the quarter, with growth reported for bags for everyday use as well as smaller backpacks and laptop cases.

Divestment of Specialty according to plan

The process to divest the operations specializing in toolboxes for pick-up trucks is proceeding according to plan. As anticipated, sales declined during the quarter due to the phasing out of private label products for Home Depot.

Rising raw material costs

Like most companies, we expected a certain increase in raw material costs during the year
compared with the relatively favorable levels prevailing in 2016. Although we factored this into our prices for 2017, the price increases for steel and aluminum in recent months have been higher than foreseen. We expect to be able to offset this, primarily as a result of a positive product mix as well as through efficiency enhancements in our production and distribution operations.

We look forward to an exciting peak season

Following a strong start to the year and with many exciting new products hitting the shelves, we look forward to an exciting spring and summer season.

Photo courtesy Thule