Rapala reports sales improvement in ‘recovering’ market

Rapala VMC Corporation has seen its profitability improve in the first half of the year in what it describes as ‘a recovering market’.

The Finnish giant, which reported an 18% decrease in net sales in its last reporting period, yesterday posted a 2% increase in revenue in the first half of 2024 of €120.5m. Operating profit rose to €11.2m compared to € 4.4m in the same period last year to deliver a 155% increase on the previous comparable period last year.

Lars Ollberg, President and CEO of Rapala, told investors: “Our strong brands and trusted position as a best partner for our customers form the cornerstones of our competitive advantage. Our most valuable brand is Rapala and its sales profitability has remained historically stable due to brand integrity despite market turbulences.”

Sales in North America, which accounts for approximately half of Rapala sales, exceeded expectations, increasing by 5% compared to the previous comparable six months. The newly launched CrushCity soft plastic lures contributed significantly to the increase in sales, which was also boosted by the performance of VMC jigging hooks.

Ollberg described the market environment as ‘reasonable’. He said: “Inflation has started to ease and retail activity improved from the previous year. Consumer appetite for lower cost consumables improved while higher value item sales are on a path to recovery.

“There is still caution among consumers and retailers for high ticket items, but the market showed improved demand towards the end of the first half of the year. A shift in retailers’ ordering pattern from pre-orders towards season replenishment favoured those with readily available inventory.”

Ollberg told investors that the trading outlook for the rest of 2024 is reasonable as destocking is tapering down in most markets. “The US market is holding its own and entering a modest growth mode with higher value durable items starting to recover and surpass sales of lower cost consumer goods. In Europe, the first half of the year results are encouraging despite a challenging market environment.”

The group expects 2024 full year operating profit to increase from 2023.

Picture: Lars Ollberg (left) with bass pro Jacob Wheeler at last year’s launch of CrushCity.