Weather and seasonality
Demand for some of the company’s products is dependent on the weather, particularly garden tools and watering products during the spring and snow tools during the winter. Unfavorable weather conditions such as cold and rainy weather during spring or no snow in the winter can have a negative impact on the sale of these products. Extreme weather conditions and prolonged cold or dry seasons are expected to increase in the future due to climate change.
Seasonal variations and weather conditions would typically be limited to a certain part of the business portfolio. A longer period of unusually poor weather in a larger geographic area could however affect overall traffic in stores and lead to short-term fluctuations in demand which may in turn lead to excess inventory of products or lost net sales.
The sale of homeware products is heavily geared towards the last quarter of the year, and any negative issues related to product availability or demand during this quarter could affect the full-year result of this business significantly.
Fiskars’ strategy is to balance seasonality by developing its portfolio and also by creating secondary seasons through marketing activities. Fiskars does not hedge weather risks. Risks associated with demand and product availability during peak season are managed by active sales and marketing activities and by systematic supply chain management. Fiskars strives to have a flexible production structure which can be adjusted at a short notice to meet actual demand.