Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Doro AB (STU:DR8A, Financial) increased its market share in Q3 compared to Q2, outperforming the market in feature phones.
- The company has started shipping its new lever range of products and is planning a media campaign to support the launch.
- Doro AB (STU:DR8A) reported a robust business performance with over 50% gross margin for the quarter, indicating structural improvements.
- The company is seeing strong growth in its Direct-to-Consumer (D2C) business, contributing to long-term margin improvements.
- Doro AB (STU:DR8A) ended the quarter with a strong cash position, with cash and cash equivalents at 215 million SEK, up from 167.4 million SEK last year.
Negative Points
- Q3 was challenging for Doro AB (STU:DR8A) in terms of top-line sales, partly due to stock sell-through ahead of new product launches.
- The company faced headwinds from exceptional sales in Q3 of the previous year, making year-over-year comparisons difficult.
- Sales in the Nordics dropped by 30% compared to last year due to a one-off event in Q3 2023.
- Net sales decreased significantly to 117.7 million SEK compared to the same quarter last year.
- The transition to new product categories was more complex this year, affecting inventory management and sales.
Q & A Highlights
Q: Will the new level feature phones be available with all partners ahead of Black Week and the Christmas holidays in all regions?
A: Julian Read, CEO: The product should be out with all customers by then. However, some factors are beyond our control, such as operators needing to certify our products. Our confidence remains high that it will be ready for Black Friday.
Q: How will the delay in product availability affect sales if it doesn't happen as planned?
A: Julian Read, CEO: It's difficult to quantify as it depends on the number and size of customers affected. However, our major customers have already certified, so it shouldn't be a significant issue.
Q: Can you specify the impact of royalty payments and inventory depreciation on the gross margin?
A: Isabelle Senges, CFO: It was probably a couple of million over, but I will need to come back with a precise percentage if needed.
Q: Will marketing spending increase in Q4?
A: Julian Read, CEO: Yes, we have initiated a brand restage project and are planning a strong digital campaign starting mid-November. This will build momentum into Q1 as well.
Q: What is the outlook for the UK and Ireland markets?
A: Julian Read, CEO: The UK market has good momentum, partly due to competitors struggling with supply. We plan to capitalize on this and further build momentum with increased advertising.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
