New Wave Group (NEWA) Q3 2025 earnings summary

Executive summary

• Q3 2025 sales grew 8.3% in local currencies, with 4.1% organic growth and 4.2% from acquisitions, despite a weak market and significant currency effects.

• All regions reported local currency growth, with North America remaining the largest market and optimism rising among some customers.

• The acquisition and consolidation of Cotton Classics in Austria from September strengthened the group's position in Germany and contributed to sales, profit, and employee growth.

• One-off costs in the U.S. related to PPP/COVID loans impacted results, but underlying performance was strong.

Financial highlights

• Q3 net sales reached SEK 2,390 million, up 3.6% year-over-year; rolling 12-month sales at SEK 9.7 billion.

• Gross margin hit a record 51.1% in Q3, attributed to favorable product mix and limited discounting.

• Operating profit was SEK 253 million, impacted by a SEK 66 million one-off U.S. cost; operating margin was 10.6% (13.6% last year).

• Net income for Q3 was SEK 166 million (204 million last year); EPS was SEK 1.25 (1.54 last year).

• Cash flow from operations was -SEK 249 million, mainly due to increased inventory and investments.

Outlook and guidance

• Management expects further growth if retail, especially sports retail, improves, but a market turnaround is still several quarters away.

• The company targets 10–20% annual growth over a business cycle, with 5–10% organic growth and an operating margin of 20%.

• Cotton Classics is expected to gradually improve margins, but rapid changes are not anticipated.

• Investments in automation, systems, and new markets are ongoing, with a goal to surpass SEK 10 billion in sales soon.