New Wave Reports Slight Decline in Revenue but Focuses on Market Share Growth
In the latest financial report from New Wave, the company announced a 1.2% decrease in revenue, totaling 2,308 million SEK compared to 2,337 million SEK in the previous period. This decline was partially attributed to a 3% negative impact from currency fluctuations, but the organic sales growth remained positive at 2%.
CEO Torsten Jansson highlighted the company’s continued success in gaining market share despite the revenue decrease. The gross profit for the period was 1,127.6 million SEK, with a gross margin of 48.9%, slightly higher than the previous year’s 48.6%.
However, the operating profit saw a more significant decline, dropping to 312.8 million SEK from 381.1 million SEK, resulting in an operating margin of 13.6% compared to 16.3% in the previous period. Jansson attributed this decrease to one-time revenues recorded last year, increased labor costs, and ongoing aggressive marketing investments in Germany and the USA.
The company’s pre-tax profit also saw a decline to 276.1 million SEK from 345.0 million SEK, reflecting the challenging market conditions. The net profit after tax amounted to 204.1 million SEK, down from 270.9 million SEK, translating to earnings per share of 1.54 SEK compared to 2.04 SEK.
Despite the financial challenges, Jansson expressed confidence in New Wave’s future prospects, emphasizing the strength of the organization and the company’s commitment to expanding market share. He outlined plans to continue investments across all markets, particularly in Teamwear products and in Germany and the USA. While these investments may impact short-term results, Jansson believes they will create long-term value for shareholders.
Looking ahead, Jansson acknowledged the uncertainty in the market and predicted tough quarters ahead. He stated, “In the short term, I do not expect to see a turnaround in the market. I anticipate further challenging quarters, although I hope to be proven wrong.”
The financial table below summarizes New Wave’s key performance indicators for Q3-2024 compared to Q3-2023:
| Metric | Q3-2024 | Q3-2023 | Change |
|———————————–|———|———|———-|
| Net Revenue | 2,308 | 2,337 | -1.2% |
| Gross Profit | 1,127.6 | 1,136.4 | -0.8% |
| Gross Margin | 48.9% | 48.6% | |
| Operating Profit | 312.8 | 381.1 | -17.9% |
| Operating Margin | 13.6% | 16.3% | |
| Pre-tax Profit | 276.1 | 345.0 | -20.0% |
| Net Profit | 204.1 | 270.9 | -24.7% |
| Earnings Per Share (SEK) | 1.54 | 2.04 | -24.5% |
| Operating Cash Flow | 191.4 | 173.3 | 10.4% |
In conclusion, while New Wave faced challenges in the recent quarter, the company’s strategic focus on market share growth and long-term value creation for shareholders positions it well for future success despite the current market conditions.