Fiskars Q4'24: 2025 outlook as expected, share correctly priced

Translation: Original published in Finnish on 2/6/2025 at 6:39 pm EET.

Fiskars' Q4 result and guidance were broadly in line with expectations, have not made any significant changes to our forecasts. In our view, the stock is correctly priced, and the expected return is mainly based on the dividend. We reiterate our EUR 15 target price and Reduce recommendation. 

Q4 roughly in line with expectations

In Q4, both comparable and reported revenues declined by around 2.5%, which was below our expectations. For the first time, Georg Jensen was also included in the comparison figures. With declines in both segments and in all geographic regions, Fiskars continues to be weighed down by sluggish demand across the board. Q4 adj. EBIT was 43 MEUR, a clear improvement from
38 MEUR in Q4'23 and slightly above forecasts. For the full year, Fiskars posted an adj. EBIT of 111.4 MEUR vs. 110.3 MEUR in 2023. The company thus achieved its guidance given throughout the year of a slightly better result, but by a very small margin. As volumes declined, the result was supported by an improvement in gross margin and cost savings, similar to previous years. In fact, the adj. gross margin for the quarter already exceeded the company's target of 49% and was 49.4%.

Positive guidance for this year as expected

For this year, Fiskars' guidance is for the adj. EBIT to improve (from 111.4 MEUR). According to Fiskars, the operating environment is expected to remain challenging, and the company did not seem to expect significant support from revenue growth this year either. The result is supported by the expected gross margin improvement and savings from organizational changes and other efficiency measures. On the other hand, the company said it will invest significantly in "demand creation" this year, such as increased marketing. This naturally limits the earnings improvement, as the effects of the investment will partly only come in the longer term, if they are to come at all.

We would like to point out that the US tariff policy may have both direct and indirect effects on Fiskars through a potential loss of purchasing power. About 30% of Fiskars' revenue comes from the US and about 25% of its purchases come from China. We believe that the US tariffs on China (10%) will put cost and margin pressure on Fiskars this year. However, the company itself said that it expects only a small negative impact from the imposed tariffs. This year, we expect the adj. EBIT to be 122 MEUR, supported by a slight increase in revenue and a higher gross margin. We made no significant changes to our estimates for the next few years.

Improved performance in coming years largely dependent on Vita

Based on our forecasts for this year, Fiskars’ adj. EBIT margin will hover around 10% for the third year in a row. The company's target is around 15%, which currently seems a long way off. We expect the margin to improve to around 12% in 2026-28 as demand picks up. The improvement in earnings and especially margins relies heavily on the Vita segment. The Fiskars segment already has a relatively good level of profitability (2024: 14%) and its growth potential is limited due to the mature nature of the market and Fiskars' good market shares. Thus, in our view, Fiskars' earnings growth potential in the coming years will culminate in Vita's volume growth, as efficiency gains alone will not lead to significant/sustainable earnings growth.

Correctly priced share, expected return comes from dividend

Fiskars’ 2025 valuation multiples (e.g. P/E 15x) are above our acceptable multiples and only within them for the 2026 forecast. Thus, we believe the share’s expected return consists mainly of dividend income and is subdued despite the earnings growth outlook for the next few years.