Björn Borg (BORG) investor relations material

Executive summary

• Own e-commerce grew 17% year-over-year in Q2, driving strong performance and profitability, with nearly all categories performing well, especially sports apparel, underwear, and the new golf category.

• Operating profit reached a record SEK 58.6 million for H1 2026, up 31% year-over-year, and Q2 operating profit improved by 11% despite a 12% sales decline.

• Gross margin improved by 5.6 percentage points to 56.2% in Q2, supported by positive FX, favorable channel mix, and lower discounting.

• Overall sales declined 12% in Q2, ending a 25-quarter growth streak, mainly due to weak wholesale performance and delivery timing.

• Strategic focus remains on long-term brand building, consumer engagement, and geographic expansion, particularly in Germany and Europe.

Financial highlights

• Q2 2026 net sales were SEK 198.4 million, down 12.2% year-over-year; H1 2026 net sales were SEK 499.0 million, down 1.4%.

• Gross margin reached 56.2% in Q2 and 54.8% for H1, both up significantly year-over-year.

• Operating profit for H1 was SEK 58.6 million (up 30.9%), with Q2 EBIT at SEK 11.8-12 million (up 11%).

• Net debt decreased significantly, reaching SEK 46.0 million (down from SEK 80.3 million), and working capital remained stable at 20-21% of rolling 12-month gross sales.

• Operating expenses decreased by 9% year-over-year in Q2.

Outlook and guidance

• Profitability targets are being exceeded, with EBIT margin above 11%, but the 10% sales growth target is not being met.

• Focus is on accelerating growth in all channels, especially e-commerce and wholesale, and investing in performance marketing and key account partnerships.

• Long-term objectives include 10% sales growth, 10% operating margin, 50% dividend payout ratio, and 35% equity/assets ratio.

• No formal forecasts provided; external environment remains uncertain due to macroeconomic and geopolitical risks.

• Germany remains a key market for expansion, with a new country manager and targeted growth initiatives.