Financial guidance for 2024 (Financial Statements Bulletin 2023, 15 February 2024)
The Marimekko Group’s net sales for 2024 are expected to grow from the previous year (2023: EUR 174.1 million). Comparable operating profit margin is estimated to be approximately some 16–19 percent (2023: 18.4 percent). Development of consumer confidence and purchasing power, particularly in Finland, global supply chain disruptions and the general inflation development cause volatility to the outlook for 2024.
Uncertainties related to the development of net sales and result are described in more detail in the risks section.
Market outlook and growth targets for 2024 (Financial Statements Bulletin 2023, 15 February 2024)
The uncertainties related to the development of the global economy, such as geopolitical tensions and their impact on the general economic situation and general cost inflation influence consumer confidence, purchasing power and behavior and, as a result, can have an impact on Marimekko’s business in 2024, especially in the important domestic market of Finland. Different exceptional situations, such as Russia’s war in Ukraine and shipping disruptions on the Red Sea, may cause even significant disruptions in production and logistics chains, and may thus have a negative impact on the company’s sales, profitability and cash flow.
Finland, Marimekko’s important domestic market, traditionally represents about half of the company’s net sales. Sales in Finland in 2024 are impacted by the weak general economy and low consumer confidence as well as the development of purchasing power and behavior. The tactical operating environment also has an impact on the business. In addition, the size and timing of non-recurring promotional deliveries in wholesale create volatility to Finnish sales estimate. Despite the weak market situation, net sales in Finland are expected to be approximately at the level of the previous year.
International sales are estimated to grow in 2024. In the strategy period 2023–2027, Marimekko will focus on Asia as the most important geographical area for international growth. In 2024, net sales in the Asia-Pacific region, Marimekko’s second-largest market, are expected to increase. Japan is clearly the most significant country in this region to Marimekko and already has a very comprehensive network of Marimekko stores. All brick-and-mortar Marimekko stores and most online stores in Asia are partner-owned. In 2024, the aim is to open approximately 10–15 new Marimekko stores and shop-in-shops, and most of the planned openings will be in Asia.
Because of the seasonal nature of Marimekko’s business, the major portion of the company’s euro-denominated net sales and operating result are traditionally generated during the second half of the year. In 2024, Marimekko’s net sales are expected to grow. Net sales in the first quarter of the year are estimated to be approximately at the level of the previous year, as wholesale sales, for example, will be partly impacted by some of the wholesale deliveries in Finland in the first quarter of 2024 being transferred to the fourth quarter of 2023.
Licensing income in 2024 is forecasted to be approximately at the previous year’s record level.
Marimekko develops its business with a long-term view and aims to scale its profitable growth in the upcoming years. In 2024, fixed costs are expected to be up on the previous year. The general cost inflation continues to affect Marimekko in 2024. Personnel expenses are impacted, for example, by general pay increases in different markets. In 2024, Marimekko is celebrating the 60th anniversary of the Unikko pattern, which provides the company with a unique opportunity to grow international awareness through, for example, various events around the world. Marketing expenses are expected to increase (2023: EUR 9.5 million).
Early commitments to product orders from supplier partners, typical of the industry but partly further emphasized by the exceptional situations, undermine the company’s ability to optimize product orders and respond to rapid changes in demand and consumer behavior, which also increases risks related to inventory management and relative profitability. The domestic non-recurring wholesale promotional deliveries also raise inventory risks. Marimekko works actively to ensure functioning production and logistics chains, to avoid delays, to mitigate the negative impacts of generally increased costs, and to enhance inventory management.
Marimekko is closely monitoring the general economic situation, the development of consumer confidence and purchasing power and the impacts of different exceptional situations, and the company will adjust its operations and plans according to the circumstances.