Björn Borg records highest H1 operating profit in company history despite sales dip

Swedish sports and fashion group Björn Borg AB (Björn Borg) has reported its interim financial results for the second quarter (Q2) and first six months ending June 30, 2026, delivering improved profitability and gross margin expansion despite top-line headwinds.

H1 net profit rises by 30.9 percent

First-half operating profit grew 30.9 percent to 58.6 million Swedish kronor, marking the highest H1 operating profit in the company's history. Operating margin reached 11.7 percent, compared to 8.9 percent in H1 2025, while H1 gross margin reached 54.8 percent, up from 50.2 percent. Profit after tax for the six-month period rose 14.1 percent to 45.5 million Swedish kronor.

In an executive statement accompanying the report, Henrik Bunge, chief executive officer of Björn Borg, said: “This is the highest operating profit we have ever delivered after a first half of the year, while sales are basically unchanged compared to the previous year. For me, it is a clear acknowledgement that we are building a stronger and more profitable Björn Borg.”

For the first half (H1) of 2026, group net sales slipped 1.4 percent to 499.0 million Swedish kronor, compared to 505.9 million Swedish kronor in H1 2025. Adjusted for currency effects, H1 net sales edged up 0.2 percent.

For the second quarter, group net sales fell 12.2 percent to 198.4 million Swedish kronor (20.79 million dollars), down from 225.9 million Swedish kronor in the corresponding period last year. On a currency-neutral basis, net sales decreased 13.1 percent. Management noted that the primary driver behind the Q2 sales decline was wholesale delivery timing, as summer season shipments were concentrated in the first quarter of 2026, whereas in 2025 they fell within Q2.

Despite lower revenue, Q2 operating profit increased 11 percent to 11.8 million Swedish kronor, compared to 10.6 million Swedish kronor in Q2 2025. Operating margin expanded to 5.9 percent from 4.7 percent. Q2 gross profit margin reached 56.2 percent, up 5.6 percentage points from 50.6 percent in the prior-year period, supported by lower discount levels, positive currency effects, and an increased share of direct-to-consumer (D2C) sales through proprietary e-commerce. Profit after tax for the quarter rose 118.3 percent to 8.6 million Swedish kronor.

E-commerce performance offsets wholesale drop

Across its distribution channels, Björn Borg experienced divergent performance during Q2. Direct e-commerce net sales increased 16.5 percent to 60.1 million Swedish kronor, with sales of sports apparel via e-commerce expanding 28% and underwear increasing 19 percent. Combined sales across proprietary e-commerce and external e-tailers totaled 89.8 million Swedish kronor, down 7.8 percent YoY.

Bunge added: “The highlight of the quarter was the continued strong performance of our own e-commerce, which grew by 17%. Our apparel collection continued to be the main growth driver. One of the quarter's greatest strengths was profitability. Our gross margin improved to 56.2%. The improvement was driven by a more favourable channel mix with a larger share of sales through our own e-commerce, lower discount levels and positive currency effects.”

Wholesale revenue in Q2 decreased 26 percent to 110.2 million Swedish kronor. Within wholesale, sales to digital e-tailers dropped 35 percent, while physical wholesale accounts fell 21 percent, primarily due to the aforementioned shift in summer delivery schedules.

Revenue from company-owned physical stores fell 19 percent to 19.1 million Swedish kronor, impacted by store closures. On a like-for-like (LFL) basis, store sales dropped 5 percent in Q2. As of June 30, 2026, the group operated 11 physical stores, down from 12 locations a year earlier.

Sales to external distributors grew 3 percent to 13 million Swedish kronor, while licensing income rose 29 percent to 0.5 million Swedish kronor.

Category and regional overview

By product area, underwear sales in Q2 declined 18 percent to 88.8 million Swedish kronor, driven by a 30 percent reduction in wholesale orders. Sports apparel sales fell 9 percent to 66.9 million Swedish kronor due to distribution timing, despite a 28 percent increase in e-commerce turnover.

Footwear sales contracted 6 percent to 12.7 million Swedish kronor, remaining below management's internal targets. Bags generated 14.7 million Swedish kronor, up 1 percent, while other product lines, including swimwear and socks, dropped 24 percent to 19.8 million Swedish kronor.

Geographically, Sweden, the group's largest market, recorded a 15 percent drop in Q2 sales to 77.6 million Swedish kronor, with wholesale revenue declining 24 percent and proprietary e-commerce expanding 23 percent. Sales in the Netherlands fell 21 percent to 43.7 million Swedish kronor, while Germany dropped 38 percent to 15.9 million Swedish kronor due to weaker e-tailer demand. Finland delivered a 9 percent increase in Q2 sales to 24.2 million Swedish kronor. Sales in Denmark and Belgium both declined 14 percent.

Björn Borg reiterated its long-term financial targets, which include annual sales growth of at least 10 percent, an operating margin of at least 10 percent, an annual dividend payout ratio of at least 50 percent of net profit, and an equity ratio above 35 percent.