Thule reports strong profitability + snaps up bike trailer firm Reacha

New Thule products continued to drive growth in Q2 despite tough market conditions, the firm said in its latest financials, with profitability was good even with major investments being made for future growth.

Notably, the Swedish headquartered firm acquired Reacha after the end of Q2, a small but leading player in bike trailers for the transportation of water sport and other equipment. Thule said: “The best products are often developed by true enthusiasts, and Reacha grew from its founder’s need to transport surfboards to the beaches along the French Atlantic coast. Today, bike trailers for transporting equipment is a small but rapidly growing category in Europe and in its infancy in North America. It is also a natural complement to our leading multisport and bike trailers for children.”

Reacha currently has annual sales of SEK 9m and will be integrated in Thule’s brand and operations, providing us with a starting point for continued development.

“US more challenging than Europe”

In the second quarter sales increased by just under 2% (in constant currency) and by 4% during the first half year. Thule said the market continues to be challenging with a high level of promotional activity and cautious consumers.

The North American market remains more challenging than its European counterparts, the firm said, and growth was driven by product launches and by bike-related products. Thule’s new premium products are driving sales growth even in these tough market conditions, it said. In the quarter, growth was strongest within Packs, Bags & Luggage (5 percent) and within Juvenile & Pet (4 percent). Categories with limited new products and low price points performed weaker.

Q2 gross margin amounted to 44.4% (43.6), the strongest ever for a single quarter. The EBIT margin was 23.6% (23.5), in line with the previous year’s strong level. Despite the record number of product launches this year and therefore higher costs, EBIT was the highest ever for a second quarter with the exception of the pandemic years. Inventory levels declined as planned. Cash flow from operating activities was very strong.

CEO and President Mattias Ankarberg said: “We continue to invest long-term in areas that create value for Thule: product development; more product categories; increased consumer visibility; and increased efficiency in our supply chain. More people also want to live active lives, a market trend that gives us a long-term tailwind.

“We are now in the middle of the important summer season with a high level of activity among consumers, customers and in our factories. We have many product launches ahead of us and more product categories to develop, and I am very much looking forward to a continued eventful year in 2024!”