Lower sales and investments in new markets cut profits of Björn Borg AB by more than half in the first quarter.
In the three months ended March 31, the Stockholm-based marketer of women’s and men’s underwear had net income of 9.3 million kroner, or $1.4 million, 55.1 percent below the year-ago mark of 20.7 million kroner, or $3.2 million. On a per-share basis, earnings were halved to 0.44 kroner, or 7 cents, from 0.88 kroner, or 14 cents.
Sales fell 7.1 percent to 140.5 million kroner, or $20.8 million, from 151.3 million kroner, or $23.3 million. Gross margin contracted to 48 percent of sales from 50.4 percent in the 2011 period.
Dollar figures have been converted at average exchange for the periods to which they refer.
“We leave behind a weak quarter,” said Arthur Engel, chief executive officer of the company. “Sales were adversely affected by cautious purchasing during the fall and profit was weighed down by higher scheduled expenses, not least from our investments in markets and a highly publicized branding event in London.”
He said the firm had experienced “continued strength” in e-commerce, as well as better turnover in smaller markets.
The company last month said it would bring its underwear and related products, including sportswear, footwear and bags, to China this year with plans to open two to four stores there this year and an additional eight stores in 2013. Sales are currently focused in Sweden, the Netherlands and the U.S.