CEO's review Q3 2022
In the third quarter, our comparable net sales amounted to EUR 293 million and were on a par with last year’s all-time high Q3 sales. This is a solid achievement given the turbulent operating environment. We are also at clearly higher sales levels than a few years ago, which illustrates that we are truly transforming the company.
While cost inflation and low consumer confidence affected demand in the Americas and Europe, we continued growing in Asia-Pacific. Our stable sales development during the quarter demonstrates the benefits of our wide geographical footprint and our strong and well-balanced brand portfolio. I would also like to thank the entire Fiskars Group team for their great work in continuously driving our Growth Strategy forward.
Despite lower volumes and continuing cost inflation resulting in flattish comparable EBIT of EUR 33 million, our actions to mitigate the impacts of cost increases delivered the expected results and our gross margin improved organically. The cost environment continues to be dynamic with significant volatility, especially in energy prices, and we are constantly taking action to offset the impacts. While we are prudently managing our cost base, we continue to invest in our key strategic building blocks: direct-to-consumer and digital.
Throughout the year, we have been able to serve our customers and avoid any major product availability challenges despite disruptions in global supply chains. This has required higher inventories, which has negatively impacted our cash flow. We have put measures in place to mitigate inventory growth, but do not expect any significant decline in inventories during the last quarter of the year.
Our focus continues to be firmly on our Growth Strategy and its four transformation levers: commercial excellence, direct-to-consumer (DTC), the U.S., and China. We can see that this focus is delivering results. Looking at the first nine months of the year, our like-for-like gross margin, which is our key performance indicator for commercial excellence, was flattish despite broad-based cost inflation. During the year, DTC has grown by 10% amounting to 19% of the Group’s sales. In the U.S., our first nine months’ sales grew by 5%. In China, all three quarters have witnessed strong sales growth resulting in 34% growth for the year so far.
Sustainability is one of the key enablers in our strategy, and we are constantly taking concrete actions to move toward our goals. One example is the EUR 10 million investment in our Iittala factory in Finland, where we will replace the factory’s existing natural gas-powered furnaces with electricity-powered furnaces. These new furnaces incorporate high-technology solutions and will use renewable energy. With this investment, we will reduce Fiskars Group’s annual direct carbon dioxide emissions (Scope 1) by 26% by the end of 2026.
With one quarter of the year remaining, we keep our guidance for the year 2022 intact and reiterate our expectation of comparable EBIT increasing from 2021. The last quarter of the year is important especially for our Business Area Vita, driven by the holiday season. The operating environment continues to be unpredictable and volatile affecting visibility. The low consumer confidence levels and rising inflation, especially in Europe and the U.S., could have larger impacts than we currently anticipate.
We continue to execute our Growth Strategy with confidence. Together with our talented team, our strategy is the key lever for delivering our guidance for the year and solid performance thereafter.
President & CEO