Fiskars' Turnaround in Motion: Vita Drives Growth, but Cash Flow Is the Real Story
Fourth consecutive growth quarter, but the focus is on deleveraging and executing a EUR 28M cost program as consumer weakness shifts to Central Europe.
FSKRS.HE · Earnings Call · 2026-07-16
The Long-Awaited Inflection Point
Fiskars Oyj Abp reported a Q2 2026 that finally signals a directional change after a prolonged period of stagnation. As CEO Jyri Luomakoski put it on the call, “It was actually the fourth consecutive growth quarter, much driven by our business area, Vita.” — Jyri Luomakoski, President and CEO · 2026-07-16 Group comparable net sales rose 3%, and comparable EBIT improved from EUR 3 million to EUR 7.7 million, a modest but important step. The growth engine is clearly BA Vita, which for the first time ever outsold the Fiskars brand in a quarter — a structural shift in the portfolio's center of gravity. The most telling change, however, is not the top line but the cash flow story. CFO Jussi Siitonen highlighted that free cash flow reached EUR 30.4 million in Q2, vastly better than last year, driven by a EUR 30 million release in net working capital. This is the direct result of a deliberate strategy to curtail production and work down inventories, particularly in Vita. As Siitonen said, “CapEx in Q2 was EUR 7 million, which is less than half what we had last year same period.” — Jussi Siitonen, CFO · 2026-07-16 That discipline is part of a broader CapEx management program the company has committed to, with a rolling 12-month level of roughly EUR 32 million.The Inventory Squeeze and the Gross Margin Puzzle
The inventory reduction comes at a cost. Vita's gross margin deteriorated in Q2, but management was adamant that this is not a pricing issue. As Luomakoski explained, the decline is a consequence of scaling down factory output to absorb excess stock: "It is because of us continuing scaling down the production... It's a lack of absorption of the fixed cost of factory facilities that is hitting the EBIT." The good news is that comparisons should ease in the second half as the production curtailment anniversary effects roll off. Siitonen confirmed earlier on the call that the delta versus last year will not be as severe in H2. The inventory challenge is squarely Vita's. Siitonen clarified: “We are not talking about Fiskars here. Fiskars inventory levels are in good order... This is very much Vita challenge what we have.” — Jussi Siitonen, CFO · 2026-07-16 Management expects the big inventory reductions to occur in November and December, coinciding with the brand's heavy Q4 seasonality, which should also help profitability given Georg Jensen's strength in that period.Consumer Cautiousness Migrates to Central Europe
A notable new theme in this report is the geographic shift in consumer sentiment. Luomakoski observed, “Declines in Central Europe, that appears to be the corner. Traditionally, it was the Finns... currently it seems that it's Germans and some other countries in the Central European markets where this consumer cautiousness is very visible.” — Jyri Luomakoski, President and CEO · 2026-07-16 This echoes a broader global narrative — the Tariff refund saga is consuming policy attention, but the real constraint on consumer-facing companies like Fiskars is softer demand in Europe's core economies. The company is leaning on the U.S. growth, which was robust, and Japan also performed well. Fiskars also provided an update on the refund process for tariff duties paid on imports. They fall into "wave two" of the U.S. refund system, which only recently opened for claims. Management tempered expectations: Jussi Siitonen stated, “Regarding our guidance, for the sake of clarity, our guidance does not include any refunds from those potential tariffs.” — Jussi Siitonen, CFO · 2026-07-16 Any cash received would be an upside surprise, but it is not baked into the outlook.Execution Confidence and the Road Ahead
Fiskars announced a EUR 28 million cost-reduction program earlier this year, targeting up to one-third of the savings in 2026. The company's conviction in the second-half ramp is grounded in execution, not hope. Luomakoski said on the Q&A:That confidence is buttressed by the structural nature of the actions — a point he emphasized in the February call: “What I think is the key differentiator here is that there are structural changes, combining some of our business units... but those structural changes drive then reductions in certain overhead functions.” — Jyri Luomakoski, President and CEO · 2026-02-05 In prior quarters, management already flagged the potential to release roughly EUR 100 million of net working capital, and the strategy to get there is now visibly underway. The company reaffirmed its guidance for comparable EBIT improvement this year, though the CEO acknowledged limited visibility. The good momentum in the core markets, combined with the cost actions, gives the team enough confidence to hold the line. With the balance sheet still above the 2.5x net debt/EBITDA target (3.42x at quarter-end), cash generation remains the priority. The regained Platinum EcoVadis status adds a sustainability credential that could support brand equity over time. In summary, Fiskars is no longer just defending; it is building momentum. The turnaround is real, but it is a marathon. The focus on cash flow, inventory discipline, and structural cost savings should set the stage for a stronger second half — and potentially a re-rating if the consumer environment cooperates. For now, the market will watch whether the SG&A savings land as promised and whether the promising signs in Vita's top line eventually translate into durable profitability.We know that we get this SG&A benefit to Vita in H2. That we know because those actions have been carried out, and the people who had to leave the company have left the company and so forth. It's not in the books, but that I would say it's in the bag per se.