Harvia Q3 Revenue +17%, Margin Slips to 17.7%; Shares Fall on Cost Growth

Harvia’s third-quarter revenue rose 17.0% to EUR 53.9 million (about USD 60 million), with growth in every region and every product group. Adjusted operating profit rose only 7.9%, to EUR 9.5 million, and the adjusted margin fell to 17.7% from 19.1% a year earlier. Harvia’s shares fell as much as 18% in Helsinki on October 29, the day the January to September interim report came out.

About EUR 4 million of the quarter’s revenue was heater deliveries held over from Q2, when an IT and process upgrade at the Muurame factory delayed deliveries. Harvia said delivery capability is back to normal. The miss was in costs: personnel and other operating expenses grew faster than sales, and a North American accounting correction took EUR 0.8 million off profit.

On the investor call, CEO Matias Järnefelt said the spending was deliberate. Harvia is hiring, marketing and developing products for a market it expects to keep growing, and he said the company accepts a quarter or two below its 20% margin target to do it. He also said more about Harvia’s North American retail partners, its West Virginia factory and its product plans than the written report did.

USD conversions use the European Central Bank’s October 28 reference rate of USD 1.1133 per euro and are rounded. Call quotes were checked against two independent transcripts of the webcast.

Investors expected about EUR 12 million in profit

Analysts at Inderes had forecast EUR 55.1 million in revenue and EUR 11.8 million in adjusted operating profit, an adjusted margin of about 21.5%. Consensus was EUR 56.2 million and EUR 12.1 million. Revenue landed close. Profit came in about a fifth below.

The stock closed at EUR 44.05 on October 28. On report day it opened at EUR 37.40, touched EUR 36.00 and traded at EUR 38.30 (about USD 42.60) late in the session, down about 13%, on more than 200,000 shares, several times a normal day’s volume. That’s still above the 52-week low of EUR 31.05. Harvia was worth EUR 807.6 million on September 30.

Harvia says the extra costs were a choice

Harvia changed when it recognizes revenue and related costs on certain North American sales. The correction cut Q3 revenue by EUR 0.7 million and adjusted operating profit by EUR 0.8 million. CFO Ari Vesterinen said it covered timing on some big-box retail and web-store sales from earlier in the year, and that he doesn’t expect similar adjustments in the coming quarters. Harvia disclosed it because it crossed the company’s internal reporting threshold.

Excluding the correction, Q3 revenue would have been about EUR 54.6 million and adjusted operating profit about EUR 10.3 million, a margin of roughly 18.9%. That’s close to a year ago but still below Harvia’s long-term target of more than 20%.

Gross margin held near its average of the past ten quarters, so pricing and product mix weren’t the problem. The pressure came further down: payroll, marketing, a busy international trade-show calendar and depreciation, which rose to EUR 2.2 million from EUR 1.8 million. Harvia added 88 people in a year, 49 of them in the US. Järnefelt said most of the hiring was in North America: factory workers, plus key account management, customer service and technical support. Järnefelt said Harvia only set up a dedicated North American sales region in January 2024 and has been building that team since.

He framed the spending as a strategy. “Great thing about growth is also that it compounds, unlike what I would call profit engineering,” he said, and he called the 20% margin a long-term target, not a quarterly one. Harvia doesn’t give guidance and didn’t say where full-year margin will land.

Big-box stores are starting to stock Harvia saunas

North American revenue grew 18.1% to EUR 19.6 million (USD 21.9 million), after 38.6% growth in Q2, and is now 36% of Harvia’s quarterly revenue. Over nine months it’s up 21.9% to EUR 67.1 million (about USD 75 million). Järnefelt said North America brought in close to USD 90 million last year. Cabins grew fastest; steam was weakest.

Asked about North American retailers, Järnefelt said they have historically carried almost no Harvia inventory. “We are their drop shipment partner,” he said: the store takes the order and Harvia ships straight to the buyer. That started to change this year, when some partners began holding saunas in regional warehouses and stores so a customer can, as he put it, “load the sauna to your truck bed straight away.” He said those inventories are still small.

He described the US price point as low enough for many households, citing a roughly USD 3,000 sauna made by Harvia’s Almost Heaven brand at Costco. He said retail listings change every year, with new products added, older ones dropped and ongoing cost engineering so partners have sharp offers. He wouldn’t name 2027 listings.

Right product, right channel, right price

Harvia sells the same brands through big-box retailers, its own websites and specialty dealers. Järnefelt summed up how it keeps them apart as “right product to right channel at right price.” Big-box partners compete on price with standard products. Harvia’s own web stores sell volume products with options, such as a full glass back wall, a Wi-Fi heater or black paint, and he said Harvia doesn’t want to undercut its biggest partners on standard products. Specialty dealers sell the premium end.

He also gave three rules of thumb for where Harvia makes its best margins. “The farther away you go from Finland, the higher the gross margin levels tend to be,” because sauna is a mature market at home and a newer one abroad. Heaters and controls earn more than cabins, though cabins bring more profit in total. And Harvia’s own web sales earn more than sales through partners, even after the marketing it spends to drive traffic. Direct sales in North America grew strongly, he said, without giving figures. Harvia opened a web store for Germany and Austria earlier this year, and he said orders there picked up quickly as winter approached.

Lewisburg was planned for five times today’s revenue

The Lewisburg, West Virginia, cabin plant expansion was nearly done at quarter end and will be finished in Q4. Järnefelt said Harvia bought a large plot around the factory about two years ago and planned the site “assuming that this site will produce 5x the revenue.” This phase added warehousing and shipping docks, which frees factory floor for production. Harvia has also rented extra warehouse space while it builds finished stock for winter.

He said investors should expect expansion every year: at close to USD 90 million in revenue, double-digit growth means far more extra product each year than when the business was a USD 10 to 20 million operation. Work on the next phase starts as soon as this one is done. Harvia also repeated that about 70% of the end products it sells in the US are made there, which limits its exposure to US tariffs. Our tariff exposure analysis compares that with other brands.

Steam is the weak spot, and ThermaSol has a 40-point plan

Steam products grew 3.3% in Q3 but are down 8.2% over nine months, the only product group in decline. Harvia’s steam business sits mainly in two places: North America, where it owns ThermaSol, and the Middle East. Järnefelt said the Middle East is about 2% of group revenue and that roughly half of it is at risk this year because of the conflict in the Gulf.

In North America, he said traditional and infrared saunas are growing faster than steam as categories. Harvia is working through a 40-point action list to improve its steam performance there, and he said steam looked better in Q3 than in Q2. He wouldn’t give ThermaSol’s own growth rate. He added that Harvia also uses ThermaSol’s dealer network to sell higher-end home spa saunas, and those sales don’t show up in the steam figures.

Asia-Pacific was stronger. Harvia reported double-digit growth in China and Japan, two of its priority markets along with the US, Germany and the UK.

More than ten launches are due by early 2027

Harvia said it finished development on more than ten products in Q3, with launches in Q4 and early 2027. The investor presentation named four:

• Kaski Cube View, a pod-style cabin with a full glass front wall and door, aimed at continental Europe as well as North America
• Harvia Cinder, a touch control unit based on the Fenix platform at a lower price. Järnefelt called it “a price fighter in this full-touch category” and said it still earns Harvia a good margin
• MyHarvia2 for Apple Watch, which lets owners of selected Harvia saunas, such as those with a Fenix control, run them from the watch
• EOS Mythos “water reflection”, a new steel finish for the EOS Mythos heater with a rippled surface meant to look like light on a lake

Harvia hasn’t published US pricing, certification or availability dates for any of them. Järnefelt said digital features such as remote control and over-the-air updates are now close to a basic requirement for sauna controls, and that Harvia sees connected users as a longer-term source of recurring revenue. Our earlier report covers how Harvia is moving remote start to Fenix.

Q4 is when the inventory has to sell

Operating free cash flow was EUR -0.1 million in Q3 because Harvia built inventory for winter, as it does every summer; it usually turns positive in Q4 as that stock ships. Net working capital is EUR 56.7 million, up 5.8% from a year earlier. Leverage is 1.2 times adjusted EBITDA, down from 1.4 a year ago and well below the 2.5-times ceiling, which leaves room for acquisitions.

Harvia reports full-year 2026 results on February 10, 2027. Watch three things: whether Q4 margin gets back toward 20% with Muurame running normally, whether US cabin and heater demand holds through the winter selling season, and whether the new products ship on time.