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With roots back to 1851, Gabriel is today a niche company within the global furniture industry, which throughout the value chain, from idea to furniture user, develops, manufactures and sells furniture fabrics, components, upholstered surfaces and related products and services, through its business areas Fabrics, FurnMaster, SampleMaster and Screen Solutions. Gabriel sells B2B, and is growing with the largest market participants, working closely with leading international manufacturers and major users of upholstered furniture, seats and upholstered surfaces.
Q3 confirms that Gabriel's continuing textile business is delivering margin progression in a market that has yet to turn. Revenue landed marginally below our estimate, but the gross margin reached the highest level of the year and EBIT, PTP and EPS all came in above our estimates. Management narrowed full-year guidance to revenue of MDKK 528-532 and EBIT of MDKK 44-46, and we trim our estimates while staying at the top of the guided revenue range. More significantly, the completed European sale at an equity value of MDKK 76.9 came in well above our previous assumption, which we view positively as it removes uncertainty and strengthens the group's capital structure. Our DCF points to DKK 278 and we retain a target price of DKK 270, but with the share price at DKK 238 we upgrade our recommendation to "Accumulate" from "Reduce".
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This morning, Gabriel released its financial report for Q3 2025/26, covering the period from April 1 to June 30, 2026. Sales from continuing operations are largely in line with our estimate, while earnings come in marginally above our estimate. At the same time, the full-year guidance is being narrowed, and there is now further clarification regarding the sale of the European FurnMaster business, which was completed on August 14.
Gabriel Holding will report its Q3 2025/26 results on 26 August. We expect revenue from continuing operations to be up 4.5% y/y, but the growth reflects a soft comparison base rather than a sequential recovery, as our estimate is essentially flat on Q2. We look for only a marginal improvement in the EBIT margin. Our attention is primarily directed to the FurnMaster divestment, for which we seek clarity on the closing timetable and net proceeds, which we expect to be applied to reducing the group's financial gearing. We reiterate our Reduce recommendation and target price of DKK 270 ahead of the report.
Gabriel has agreed to sell the European FurnMaster operations, comprising the Polish and Lithuanian subsidiaries and the dedicated Aalborg division, to a Leggett & Platt subsidiary at an enterprise value of DKK 67.3m, plus a conditional deferred payment of up to DKK 7.5m. As we estimate the European part constitutes the majority of FurnMaster, we now value continuing operations alone and exclude FurnMaster entirely from our estimates, including the still-for-sale Mexican business, which we treat separately as a potential source of proceeds rather than earnings. This reflects management's strategic pivot towards developing the global textile business.
