Good morning, welcome to our Q1 2026 report. It's a beautiful Wednesday morning; that's not the only thing that is beautiful this morning. It's also our Q1 . Of course, it's always, you know, good to read your own quotes. To summarize the quarter, our Sports Apparel growth continues. Now, we've been growing double digit for 15 consecutive quarters. This is also our 21st quarter with sales growth. Of course, we look back at a very, very strong journey, never before have we started a year stronger with both record sales and a very, very strong operating margin, increasing 37% versus last year. All in all, absolutely fantastic. Net sales, as I say, SEK 301 million, that's a record quarter. Super good, +7%.
The quarter, currency neutral, it's just above 10%. The gross margin is at 54%, good increase versus last year. The operating profit, consequently, is also increasing then with 37% versus last year, hitting SEK 47 million. Overall, a super strong start of the year. Given of course that the world around us has been fueled with uncertainties, we're super proud. Of course, clearly this is the effort of a very strong team that don't actually work quarter- by- quarter but rather have a long-term perspective. Again, just to remind us all, this journey was never about making a quarter versus the quarter before. It was about transforming the brand into becoming something bigger, moving into a bigger house, a bigger arena.
The idea, of course, was to build a sports brand from this old, very beautiful underwear brand. Our mission and that's the one that we would want then the consumer to tap into, is about inspiring people that you can be more, that you should train, not to win Olympic gold medals, even if that's okay too, but it's far more important than that. You should train to live longer, be happier, be a better father, laugh more. That's really the core of our message. Looking at the financial KPIs, we've said that we want to grow double digit 10%, currency neutral. We started the year doing that. Of course, the world is not currency neutral, we're a bit shy with just above 7% growth.
Looking at our operating margin, of course, you know, well above our target. Well, the dividend, let's see. We've proposed SEK 3, but of course that will be determined in our AGM in about two or three weeks. A very strong history of a high dividend over the years, so a good direct yield of course for the company. Looking at equity asset ratio is also, you know, very, very healthy. Of course, you know, one highlight is that the net debt is, say, lower this year versus last year, which of course is also very, very good.
Our strategy has been really grown online, so both own eCom, but also of course our e-tailers and marketplaces, focusing on the wholesale business, in terms of own channels, really pushing D2C, with own eCom in the spear front. In terms of category, of course, the most important one is Sports Apparel. Again, to repeat myself, this is now the 15th quarter in a row with double-digit growth, so super strong. The next, of course, growth engine will be Footwear. However, that is not developing the way we want, so we're actually declining in the quarter with 20%. However, there is a few highlights, even in the Footwear category. Sweden is actually up 14%. Own eCom is up 10%. Denmark is up 60% on low numbers.
We see that the Footwear collection has been perceived as really, really well in some markets, and then we need to do some structural changes in some other markets where we actually have reinforced the team in both Holland and Belgium. Hopefully then that will also fuel then Footwear growth, which is one of the identified growth initiatives going forward. Our focus in terms of geography is still the same. We want to continue to grow where we already are. What we've said is that we want to open up one new market, and that's Germany, so nothing new.
Of course, massive growth numbers from the German market in the Q1 gives us a lot of confidence that this is actually the right decision, even though we also see that the consumers in Germany are a bit hesitant, even more so than actually the Nordic ones. Again, you know, with small market shares, you can grow in a growing market but also in a declining market, and that is of course our approach. Looking at the brand, so our most important asset together with the team and the two things that makes us completely unique. It's growing in most of our markets, in most of our KPIs, a couple of highlights. Brand Consideration for HIM in Germany is up 500%. Yes, low numbers, again, of course, we're slowly building the brand in Germany.
Looking at Brand Consideration HIM, that's growing. Could you consider buying from this brand? A very, very strong brand KPI. Looking at Brand Consideration HIM, again, also growing versus last year with 24%. Super strong traction for the brand and very, very important, of course, to continue to fuel this growth journey that we are on. Here, listing, of course, all of the brands around us. It's a very, you know, competitive landscape, and we of course are dominated by two giants in terms of Nike and Adidas. When we ask consumers across all our markets, we see that we are, you know, one of the few brands that actually are increasing consideration, where actually most others are declining versus last year.
Of course, that is reassuring and showcasing that the communication we do, the products that we put into the market, and the whole team is really slowly then building this brand into something bigger and stronger than what it was yesterday. That is, you know, exceptionally good. With that, of course, we will dig a bit into numbers. Of course, you know, no one is better doing that than my CFO Jens. We will continue to talk about records. Again, you know, the highlight, if you missed that, SEK 300 million. We have never sold more, congratulations, Jens, to a job well done.
Thanks a lot, Henrik. That warms my heart. Well, good morning from me as well. It's a beautiful day. Someone once told me that the day will only become as good as you'd let it. I think that's quite wise. That was you, Henrik. I think that's a wise saying. I'm going to live for that. The sales for the quarter have they started really well this year. Over SEK 300 million, as you can see from this slide. Never have we sold more any quarter in the company history. That's 7% up, as Henrik already said, currency neutral, that's above 10% growth. If we look at the different categories, Underwear had a really strong quarter, plus 15%, which is extremely good.
Many of the wholesale markets have delivered a Q1 in Underwear category super strong. Apparel continues to grow double digit, 12% in Q1, Socks 30%. Other categories, as you heard, Footwear, for instance, is declining, and so is Bags. There's we still have some work to do. Looking at the geographies and the markets in our own subsidiaries, most of the markets are growing. However, the Benelux markets are declining, mainly related to the Footwear category, as I just mentioned. The biggest market, Sweden, is up 3%. Finland, super strong, so 27% up. Denmark, low numbers, but close to 70% growth. Distributors as a whole is growing as well. However, it differs wildly between the different markets.
The biggest one, for instance, Norway, is declining, while the joint of the smaller ones is increasing rapidly with 160% up. If we look at the channels, wholesale, as I mentioned before, super strong double-digit growth, 11%. Here we see mainly the e-tailers or the online players within the wholesale segment are growing quite fast with 20% up. Also the physical stores or the brick-and-mortar are growing 7% in the quarter. Own e-com is still growing, however, a bit slower than what we have seen before, but still on a good track. Own retail declining heavily with 29%. However, that's not comparable, so we're closing down stores, that's why the numbers looks like quite a big decline.
However, comparable stores, meaning the stores that were open, the same quarter last year, they are also declining with 8%. Something needs to be done here as well. Distributors, as I said, up 9% as a whole, where the smaller ones, actually, Austria and Slovenia, for instance, are growing really quickly at the moment. Gross margin up four points, up to 54%. Super strong quarter. And also, as you heard before, the operating margin or the EBIT is up 37% in the quarter to SEK 47 million. Extremely strong. Never have we had a stronger EBIT in any Q1, in the history of this company. Super glad to see that, obviously. If we summarize this to a simplified P&L, sales, as I said, 7% up, over SEK 300 million.
Margin 54%, four points up versus last year. The operating expenses are increasing as planned with SEK 220 million, 8% up, that brings us to an EBIT of then SEK 47 million. The margin is also increasing with 3.4 points to 15.3. Before I hand over to Henrik again to close this up, a few highlights from the balance sheet as well. The solidity of the company is also increasing, being stronger. 53.5%, 1.5 points up versus last year. As you heard before, net debt is decreasing, that's very positive to see. We're declining that one with SEK 15 million. The working capital is fairly stable. We've said before we want to track around 20%, that's more or less where we are.
There are good numbers in the balance sheet as well. I'm super pleased with the quarter. Wishing you all a fantastic week. With that, Henrik.
Yes
I hand over to you again.
Brilliant, brilliant. Thank you, Jens. To wrap it up then, three, I think, major key takeaways. The first one is the Germany. Not only are we growing strongly in the German market, also we see that the brand is getting stronger and stronger on fairly low levels, but still, the strategy of really focusing on Hamburg and building it, you know, from one street to two street, to one city to two cities is really, really working for us. The second one, of course, we have a very, very strong wholesale development, growing in the quarter, you know, especially of course driven by, you know, Finland, Germany, Denmark, and Sweden. Here within that, we see good momentum within e-tailers. We see that the distributors are recovering as well.
Again, of course, small numbers in the quarter. Looking at the categories, both Underwear and Sports are really growing versus last year. Of course, again, as we've said now numerous times, if you want to keep track on whether what we're doing is working, you know, look at the Sports Apparel development. Now again, 15th quarter in a row with double-digit Sports Apparel growth. Of course, we're super proud over that. To sum it up, a very strong start of 2026. Again, we're here for the long run, I'm sure there'll be strong quarters and perhaps there will be weaker quarters, you know, who knows?
Overall, of course, our ambition is to constantly improve and become better every day, and I think we've now proven that for a number of quarters in a row, which is, of course, thanks to a great team focusing on this idea that you can indeed move a strong Underwear brand into a bigger arena and build then a global sports fashion brand. As we've said a couple of times, even though we've been here for a long time now, this is merely the beginning. I think we're up for something really, really big here if we do things right. I think with that said, you know, thank you for listening in. Let's see if Hjalmar has any questions. He usually has some stuff that he wants to ask us. Let's fire away.
Yes. Thank you so much, Henrik. I think, we should start at the strong point of course, in the Sports Apparel. I mean, could you break this growth down a bit maybe in terms of markets? Do you feel that you're gaining market share? Maybe elaborate a bit on the underlying drivers of the strong Sports Apparel growth that we saw here in Q1.
No, no, I think we absolutely see that we're taking market shares, and we've been doing so for, well, 14th or 15th, perhaps even 16th quarters. The underlying growth is not even close to our growth numbers. It's spread into two parts, of course. On one hand, we do performance products that you can use when you're actually working out. Of course, at the same time, we're doing Sports Apparel that you can use on your way to the gym or when you're leaving the gym. Of course, the intersection between those two is really blurry. Of course, you know that the consumers are wearing tights when they go out for dinner, and sometimes they're wearing a cotton T-shirt when they go out for a run.
I think we want to be, you know, in that middle where we're called sort of, you know, Train for Life, really mixing those products. Both it's really growing. We see a very strong growth in women, and of course, we believe that's going to be crucial to continue to fuel growth going forward, given that in the past, of course, men have been really the big part of our Sports Apparel volume. Now, at eCom, for example, women are bigger than what men has in certain month. Overall, of course, it's a fairly even share now, women and men, which I think is also a sign of strength.
Yep. Okay, thank you. If we look at the channels, I mean, we have seen previously that you've been able to grow, of course, in a tough and challenging environment. We know that many other consumer-facing companies are facing a challenging environment right now. Despite this, the wholesale is showing impressive growth here. Is this reflecting maybe an optimistic view among the wholesale customers, or is it that you have success, you know, with the new product segment launches, for example? Could you elaborate a bit on this?
Well, I think there's many different components. Of course, it's clear when we sort of open up the office doors and look out at the reality, we see that the consumer sentiment is a bit hesitant. Consumer confidence is decreasing. I think I read yesterday in Sweden was 95% where index is 100. In Germany, it's even lower. Of course, last two-month , people are a bit more concerned than what we saw in the beginning of the year. It seems to me that that's almost like a new reality. I can't now even recall, you know, when we had a quarter when things were sort of normal. I think that's just something you need to, you know, learn, you know, to navigate within.
I think our strength has always been that we have been operating various different channels very successfully. Sometimes eCom is doing really, really well. Other quarters, you know, wholesale is doing really, really well. Sometimes within wholesale, e-tailers are doing well, and other quarters, brick-and-mortar is doing well. I think we simply need to be able to operate, you know, wherever the consumers decide to be. Again, if you look at our categories, we know from the past that Underwear has, you know, really no impact on how the economy is going. It's a very stable category. You never really need a pair of Underwear, but also you can always buy a pair of Underwear. Of course, here we are market leader and still top of mind.
Of course, that is helping us when consumers are perhaps a bit more hesitant to purchase more expensive stuff. When it comes to Sports Apparel and Bags and Footwear, we're, you know, we're still very small. Even if we would, you know, grow 10, 15, 20, 25%, we still only have a fraction of the overall market. Of course, that means that we can still grow even though the market is declining. Even though, of course, it's easier to grow when everything is growing. I think the quick answer is I think we manage to navigate because we operate different channels. We have product groups within those channels that is sort of helping each other out when the world is a bit challenging.
Thank you. If we look at other product areas, we look at the Footwear, for example, or maybe the Bags here. What are the challenges or your focus areas now during 2026? Do you feel that you have a product offering that you're satisfied with? Is it a matter of, you know, addressing the customers from here on? What are the challenges maybe that you will address? What, where will your focus be in 2026 considering these product areas?
I know the focus, of course, we took over now Footwear, you know, roughly two years ago. Of course, we knew that, you know, integrating something is always trickier than what you would want it to be. It's going to take a bit of time to rebuild and do something that will also be maintained over the years. The first thing you do, of course, is to make sure that you create a strong collection. Of course, it takes a bit of time. You know, the lead times in wholesale is roughly between 20 and 21 months from you say, "Hey, this is a great product," until you have it on the shop floor. It takes a bit of time if you want to do wholesale. That, of course, means that to change something, takes time.
That's why you, of course, need to start working with a product. When we look at the collection that is out in the market right now, I believe it's very, very strong. Also we see a few evidence that also the end consumer is really picking that up. Again, Sweden is growing Footwear with 14%, own eCom is growing 10%. Of course, we see that there are, you know, pockets of Footwear growth. However, of course, the Holland and Belgium is drastically declining Footwear. Actually also now versus fairly low numbers last year. Of course, here we need to rebuild. Of course, it's a new team in place. We need to slowly rebuild, you know, confidence amongst the distribution landscape on Footwear in those two markets.
When we do that, of course, then the entire category will start growing again. But again, it's going to take, it's going to take time. The longer it takes to rebuild something, you know, the longer it takes to breaking down again. We're not in a rush, but of course, we want Footwear to start growing, you know, versus last year's numbers. But that clearly, you know, takes a bit of time for us.
Thank you. Looking at the strong gross margin, I mean, we know the channel mix is important here. Maybe we saw some growth from more dilutive areas actually in the Q1 here. Could you elaborate a bit on other items, maybe pricing, maybe the product mix, or currency? How did these items impact the gross margin that we saw here in the Q1?
Of course it's, you know, it's many, many different, you know, aspects, of course, that, you know, together then will give us a strong gross margin. One of the biggest impacts is, of course, you know, which category that is growing. Underwear being strong is good because we have high gross margins. Footwear declining is actually something good because it's slightly lower gross margins. Looking at the channel, D2C, eCom has a strong gross margin. Of course, when eCom has a bigger share, they'll, you know, lift up the gross margin. There's a number of different, you know, components. Again, of course, also looking at Q1, it's very clear that, you know, one big part of the currency increase is currency related.
Of course, we've been working, you know, against the currency almost every season since 2014. Now since roughly a year back, the Swedish krona has, you know, really strengthened a bit, you know, up and down. Over the months, you know, continued to strengthen predominantly versus the US dollar. Of course, we are buying in US dollar and in euro, but we don't sell anything at all in US dollar. Of course, you know, that has an impact on our gross margin. That is really the impact. You know, currencies, channel mix, and product mix, those are sort of the three big components. Of course, our ability to increase prices and negotiate what we buy products for, but that's something ongoing.
Those three is really the stuff that is making the quarters look a bit different.
All right. Thank you. Yeah, that's clear. Lastly on the own online, now you're back to single digits growth in own online, we've seen this previously, it's only been a historical lump, you return to double digits following this. Do you feel confident when maybe if you look forward that you can come back to double digits in the own online? What are the challenges that you see in this channel?
I try a bit to avoid then, you know, the giving too much of a forecasting. I don't want to say what we will then, you know, do in the future, but very clear, of course, our ambition is to grow more than 2%. Actually, if you look at article sales in Q1, we will actually grow in probably 4% or 5%. It depends on a bit, of course, how you close the quarter, you know, how much returns you do. That's a bit of a trick. We're growing a bit more than two. With that said, the growth is, you know, not where we want it to be. Yes, of course, we've been elaborating a bit with actually decreasing discounts and more full price business.
Of course, we know when the world is a bit, you know, worried, the consumer gets even more, you know, price focused. You want to make a good deal. Of course, that has impacted us a lot when it comes to driving growth. We see that the gross margin is actually better than last year, but we also see that marketing investments is higher than last year. Actually, even though we're growing top line, you know, profitability actually, you know, is slightly lower than the year before. It's clear that, you know, also driving eCom is changing. We now have, you know, AI. There's a lot of stuff happening around us. What you need to do to be successful driving D2C tomorrow is going to be completely different from what was required only a year ago.
We have a you know, strong team in place, you know, very AI savvy, so I'm confident that we can, you know, grow, you know, above and beyond what we saw in this past quarter.
All right. Thank you so much, Henrik and Jens, and congratulations on a strong quarter. I'll leave it to you for any concluding remarks.
Thank you. Thank you, Hjalmar. Again, of course, it goes up and down. We're, you know, of course, you know, super happy with a strong start of the year. I think, our key message, you know, one that we want to say is what is on the screen right now. You know, train to live is really what we want to talk about. Whatever you do today, make sure you get your workout done, and it could be walking up the stairs or taking a run. That's going to be the best gift you can give you. If you want to top that up, well, do that then in a pair of Björn Borg products, and it's going to make your day fantastic. I think with that said, looking forward to seeing you guys soon again.
Have a great Wednesday. Thank you, Hjalmar, and thank you for being in this beautiful office here as well.
Thank you.