Source: Inderes & Pinpoint (retail consensus 05.11.25, 31 estimates)

Björn Borg will report its Q3'25 results on Friday, November 14. We expect solid top-line growth, primarily driven by strong sales to larger retailers in mature markets. We anticipate that sales growth, together with positive FX effects on gross margins, will keep profitability at good levels. Our focus in the upcoming report is on the company's main growth categories, sports apparel and footwear, as well as confirming that the company can successfully expand its revenue while maintaining solid underlying gross margins.

Revenue growth expected across key segments and geographies

We forecast Björn Borg's Q3 revenue growth to be 10% in local currencies. However, we expect a negative FX impact due to the strengthening SEK, leading to 7% reported revenue growth, slightly above Retail Consensus (Pinpoint Estimates). By segment, we expect Wholesale to show the strongest growth (11% y/y), driven by good growth in Sports Apparel and the Underwear segment, which faces soft comparison figures from Q3'24. We estimate that revenue in the second-largest segment, own e-commerce, will increase by a solid 5% despite tough comparables. In the Own Stores segment, we estimate modest revenue growth (2% y/y), mainly due to the continuing closure of unprofitable stores. Among the smaller segments, we expect revenues in the Distributor segment to decline by approximately 20% due to tough comparables and large inventories, while revenue contribution from the Licensing segment is expected to remain modest following the integration of the footwear category, which previously constituted a significant part of this segment.

By geography, we anticipate strong revenue growth in Björn Borg's larger markets, Sweden and the Netherlands, which are facing easier comparison figures and are supported by stable market data from the underlying clothing market seen in Q3, with the Netherlands up 4% and Sweden up 6%, respectively.

Gross margin expected to benefit from FX tailwinds

We forecast Björn Borg's FX-adjusted gross margin to decline to 49% in Q3'25 compared to 51% in the same period last year. This is mainly driven by a higher share of sales to larger key accounts with slightly higher discounts. We also believe that the company's focus on growth will continue to be reflected in lower gross margins to increase market shares and drive growth. However, we expect FX effects to support the gross margin positively, resulting in a reported gross margin of 53% in Q3, compared to last year's level of 52%. In terms of operating expenses, we estimate an increase due to heightened marketing activities. However, we believe that the sales growth, together with a slight gross margin expansion, will result in an increase in absolute EBIT to 47 MSEK (Q3'24: 42 MSEK), slightly above Retail Consensus. At the bottom line of the income statement, we anticipate a decline in EPS to SEK 1.35 (Q3'24: SEK 1.39), mainly due to a negative FX impact on net financial items.

Outlook likely to remain positive, but growth targets remain challenging

Björn Borg does not provide financial guidance and makes no concrete comments on the future but only refers to its financial targets, which are at least 10% revenue growth and an EBIT margin of at least 10%. While we expect Björn Borg’s growth outlook to remain good in Q4 as well, driven by a gradual recovery in consumer demand, we believe achieving its target of 10% annual sales growth will be challenging. However, we believe that the company’s margin will remain at good levels, on the right side of its target, driven by solid sales growth, especially in the profitable Own e-commerce segment, as well as FX tailwind due to a weaker USD.