Marimekko issues improved guidance, but uncertainty remins
Finnish textiles-to-fashion firm Marimekko on Friday updated its guidance saying net sales will be lower for the full year while comparable operating profit could be at a similar level to last year, but might also be lower.
The less-than-precise guidance reflects ongoing uncertainty as businesses try to figure out how trading will progress for the rest of 2020.
The company withdrew its earlier guidance back in March solely due to the estimated impact of the coronavirus pandemic. And in its interim financial report in August, it said the pandemic would have a significant negative impact on its sales and profitability, but that the situation was changing rapidly.
“Even though there are still major uncertainties related to the exceptional circumstances caused by the pandemic, Marimekko can now better estimate the impacts on its business,” it said Friday.
And while sales (and possibly profits) are expected to be down, this still represents an improvement on what had been foreseen earlier.
This improved outlook is mainly based on a better-than-expected trend in Finnish retail sales during the summer, an improved wholesale outlook for the rest of the year, as well as higher-than-estimated fixed cost savings during the remainder of the year.
But as mentioned, there are still “significant uncertainties” linked to that outlook.
“The outlook for [our] important domestic market as well as for the group’s total retail sales essentially depends on the trend in customer numbers in retail stores during the rest of the year and whether there will be new major coronavirus infection waves in the fall, which may require temporary closures of [our] own retail stores,” it said.
It added that its wholesale partners’ and customers’ recovery from the crisis can also “impact their replenishment orders during the remainder of the year and so Marimekko’s full-year outlook as well. Furthermore, the global crisis may affect the operational reliability of the company’s value chain”.
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