Where went the winter?
I could probably just use last year chairman letter and copy it, especially concerning the weather situation. Like last year the extremely warm weather hit our business in all segments and most markets. As last year we had a promising start and a reasonable ending at least in retail when the weather became more normal. Unfortunately, the winter turned up after the important Christmas season so the impact on the whole quarter was minor. We also need to ask ourselves how much Christmas means to our industry and ask if we are more need base, as an example in some of our markets July has as high sales as in December. The introduction of the black weeks, which is close to the holidays, probably means that a lot of shopping has moved there driving a generally more discount driven sales season. Another trend globally was that our digital sales channels in general underperformed compared to brick and mortar like it has for the whole year.
This means that we, in Q4, despite that, showed a slight growth on last year’s sales 188.8 MEUR vs 177.8 MEUR, an increase of 6.3%. Primarily driven by Devold.
The operating result landed at 3.0 MEUR vs 2.6 MEUR last year.
However, during the quarter, we took several one-time cost/reservations/write-downs of assets costs of totally 4.0 MEUR of which 2.5 MEUR is related to the move of the warehouse operation to Ludwigslust, 0.7 MEUR due to the implementation of the new ERP System and 0.8 MEUR of costs incurred by integrating Devold. Our EBITDA increased from 17.2 MEUR to 20.5 MEUR. This means that we clearly see an improvement of our efficiency and a lower cost base
Brands
The Brands segment, excluding the effect of the North American wholesales business, showed increased sales, including internal, of 6.7%. The increase was driven by the addition from Devold. The North American retail operation continued their improvement in local currency. Total consolidated North American operation did show an improved result despite the customs change during the year decreasing the margin. The operating profit was down from 5.0 MEUR to -0.4 MEUR driven by costs for moving the European warehouse services from Almere to Ludwiglust, the integration costs of Devold, lower sales by Fjällräven in Europe and that North America is moved from Global Sales. We have one market except China, reported in Global sales, that is outperforming the others and that is Canada, which totally grew both direct to consumer and wholesale. The overall growth was 17.1% in local currency.
Global Sales
Overall Global sales decreased in net sales to 29.8 MEUR vs 42.3 MEUR last year. Most of the decrease was because the North American business now is accounted in Brands. On a like for like, the European sales was up 6.7%. The Asia/Pacific markets did not perform up to last year except for China which continued to grow both in sale and bottom line. The operating profit ended 2.8 MEUR (-1.2 MEUR). The improvement was mostly due to the move of the North American wholesale market to brands but the bottom-line was above last year in Europe.
Frilufts
Frilufts sales was down in sales to 95.5 (97.0) MEUR, where only Denmark showed growth . EBIT ended up 47% at 2.6 MEUR (1,8) MEUR). The reason for it increasing ,still including higher salaries and a larger than normal inventory write off in Sweden was that Germany lowered its losses to make up for the differences, in while not achieving last year’s sales, due to becoming more efficient.
Retail channel development from a Group perspective
Our total brick-and-mortar sales was 73.3 MEUR vs 73.5 MEUR last year. Our digital sales decreased from 41.6 MEUR to 38.3 MEUR.
Some words on 2025 and 2026 and forward
We are still facing a challenging market in 2026. In terms of orderbooks for 2026 it does look promising. Last year I wrote “There signs of retailers being cautious of taking risks in inventory. They are counting more on reorders from the Brands. My prediction in this showed itself correct in the 3rd and 4th quarter in 2025 and it was strengthened by the warm weather until Christmas. So, the higher than before dependence on in season remains and thereby the higher inventory risk. I already want to give an indication on how the first couple of weeks of 2026 has been. Frilufts has, as the cold weather came, shown very good sales to consumer in January. We have in many of the markets 15-20% growth. It amazes me however why so many players keep on discounting despite a real demand in the market, which means that the general price pressure. In terms of the supply chain there is some improvement from the weakening of the USD vs EUR. This means that during the year forward we will see an improvement of our margin. Due to our policy of hedging our purchased volumes we expect to see a gradual improvement during the year, but no full effect until Spring/Summer 2027. In terms of the political environment the world is as it is, very unpredictive so we must constantly be able to act on the changes.
Our new ERP systems continue being rolled out this year. This has enabled us to better plan and change our business to become more efficient and focus more on consumers and channels. We will see some effect on this already in 2026, but more in 2027. We will also be able to change our purchase and delivery pattern to better deliver our consumers, our retailers as well as our inventory planning. The new ERP we believe strongly will increase our ability to act fast in a market that is changing fast also through adding capability to better predictability, combining better internal information with AI solutions to make better decisions earlier making us faster as individuals and as a company.
In terms of cost, we see the first effects of the move into our new automated inventory operation in Ludwigslust. We expect annual savings of up to 4 MEUR in 2026 starting in Q2.The effect will be smaller in Q1 due to possible hitches with our new ERP system to keep with the large volumes during preorder deliveries then. We also will take a one time further reservations of about 0.8 MEURO in the end of Q1 related to the Frilufts operation, which will have an effect of lowering the cost during this year of 1.5 MEUR .The full year effect in 2027 is estimated to be around 4.1 MEUR. Our scaling down general cost level goes by reallocating funds to get better effect. We are also relocating more funds to marketing in some key markets.
So, with the risk of repeating myself; our focus this year again will be on sales and cost control.
I also, once again, want to take this opportunity to thank our management, ALL employees, board, shareholders and not the least customers for their efforts and loyalty in helping us. This year I especially want to thank everybody involved and have carried and for a while more carry the workload with our systems change and warehouse move like administration, IT, in house sales, logistics, etc.
All the best
Martin Nordin, Chairman of the Board
