New Wave Group (NEWA) Q2 2024 earnings summary

Executive summary

• Net sales for Q2 2024 reached an all-time high at SEK 2,397.9 million, up 4% year-over-year, with growth in both profile and retail channels and positive initial client reactions to the Craft teamwear launch in the U.S. and Canada.

• Operating profit for Q2 decreased to SEK 301.2 million from SEK 363.9 million last year, mainly due to higher costs, increased market investments, and lower gross margins.

• Cash flow from operating activities improved significantly to SEK 337.5 million in Q2, up from SEK 230.1 million last year, aided by reduced inventory.

• Equity ratio improved to 60.2%, providing financial flexibility for growth and acquisitions.

• Management remains optimistic for long-term growth, with confirmed orders ahead of last year despite ongoing market challenges.

Financial highlights

• Q2 gross margin was 49.0% (49.5% last year); H1 gross margin was 49.3% (50.1% last year).

• Q2 operating margin was 12.6% (15.8% last year); H1 operating margin was 11.1% (15.3% last year).

• Q2 net income was SEK 210.3 million (SEK 259.6 million last year); H1 net income was SEK 331.4 million (SEK 481.8 million last year).

• Earnings per share in Q2 were SEK 1.59 (1.96 last year); H1 EPS was SEK 2.50 (3.63 last year).

• Cash flow after investments in H1 was SEK 416.0 million, up from -86.5 million last year.

Outlook and guidance

• Expects growth in the second half of the year, with performance at least matching or exceeding Q2, and continued investment in marketing and OpEx to leverage competitor weakness.

• Management remains optimistic for long-term growth despite short-term turbulence from geopolitical risks.

• Anticipates profitability in North American teamwear by 2026, with ongoing investments in 2025 and inventory investments projected to reach SEK 200–250 million by 2026.

• Confirmed orders are currently better than last year, supporting a positive outlook.