Björn Borg

We expect that strong sales growth, together with positive FX effects on gross margins, will keep profitability at good levels.

Björn Borg’s Q2 results were mixed. While the company reported strong revenue, it did not come without costs and profitability was lower than our expectations. The company’s earnings multiples for this year are at the upper end of our acceptable valuation range, with a P/E ratio of approximately 18x and an EV/EBIT of ~14x. At current valuations, we would like to see clearer evidence that the company can successfully expand its revenue while maintaining solid gross margins. As a result, we reiterate our Reduce recommendation and target price of SEK 55 per share.

Björn Borg's Q2 report delivered mixed results. While revenue slightly exceeded our expectations, profitability fell short, primarily due to lower gross margins. It is worth noting, however, that Q2 is seasonally the smallest quarter, accounting for only around 5% of full-year EPS on average over the past three years.

Björn Borg will report its Q2’25 results on Friday, August 15. We expect some revenue growth despite tough comparable figures and FX headwinds, and profitability to remain at good levels. Our focus in the upcoming report is on the company’s main growth categories, sports apparel and footwear, as well as demand-related information.

Björn Borg delivered a solid Q1 report, broadly in line with our expectations. As a result, we are maintaining our estimates largely unchanged. However, despite the good Q1 performance, the share price has risen nearly 20% since our last update. At current valuation levels, we view the risk/reward profile as less attractive. Consequently, we turn to a Reduce recommendation (prev. Accumulate) but maintain our target price of SEK 55 per share.

Björn Borg will report its Q1’25 results on Thursday, May 15. We expect solid revenue growth compared to the same period last year, primarily driven by the integration of the footwear category, increased sales in the sports apparel category, and continued good development in own e-commerce. We estimate a lower gross margin due to a shift in the sales mix, as well as higher operating costs, mainly due to increased marketing activities. However, we believe that the strong sales growth should provide some operational leverage leading to a slight increase in absolute EBIT. Our focus in the upcoming report will be on updates regarding the footwear transition, as well as demand-related information.