• FY earnings drop to SEK13.9m
  • Gross margin widens to 50.9%
  • Sales fall 9%

Weak demand and widespread market uncertainty weighed on earnings for underwear brand Björn Borg in its last fiscal year.

In its latest annual report, Björn Borg revealed earnings had dropped to SEK13.9m (US$2.1m) from SEK47.2m a year earlier. This was largely due to its biggest market, the Netherlands, where the firm's local distributor significantly reduced its network of retailers in a generally weak market.

Profit was also negatively affected by SEK26m, comprising delivery delays of about SEK12m, non-recurring items in China, and severance for its resigning CEO totaling SEK14m.

"We have seen a sense of cautiousness among our retailers in Sweden and other markets as well, with some chains placing more focus on private labels," acting CEO Henrik Fischer said.

The firm's gross profit margin widened to 50.9% from 50.2% a year earlier, while sales dropped 9% to SEK499.2m. Excluding currency effects, sales were down 8%.

Fischer added: "We are seeing a slight increase in follow-on orders, which shows that sales at the retail level have probably done a little better than retailers had hoped. We also saw a positive sales trend in our own operations in England and Finland."