Coats Group reiterates outlook despite 'subdued' market

(Sharecast News) - Industrial thread specialist Coats Group reiterated its full-year guidance on Friday, despite difficult market conditions. Updating on trading in the four months to 31 October, the British firm - which supplies the clothing and footwear industries - said sustained macroeconomic and tariff uncertainty had weighed on trading.

"Market conditions remained subdued, with continued caution in customer ordering patterns," it noted.

As result, group revenues softened 1%.

Revenues in apparel were down 2%, due to "challenging" end markets, while in footwear, revenues were 4% lower.

However, operating profits remained at a similar level to the same period a year earlier, after Coats focused on its cost base.

It concluded: "Given the resilient performance to date, the group's full-year outlook remains unchanged, with performance in line with market expectations."

As at 1000 GMT, the FTSE 250 stock was trading 1% higher at 80.3p.

Earlier this year Coats agreed to buy OrthoLite, a US-based footwear insole maker, for $770m including debt.

Coats said the business had continued to perform well, with "strong" revenue growth and high operating margins.

It said: "The acquisition of OrthoLite and the portfolio realisation actions now taken improved the quality of the group.

"As a result, we are on track to continue our outperformance of underlying market growth, supported by expansion into target adjacencies, and deliver strong cash generation and further margin progression in the medium term."

Coats, which traces its history back to the 1750s and now employs around 16,000 worldwide, is due to publish full-year results on 5 March 2026.

The firm posted earnings of $200m on revenues of $1.5bn in 2024.