Lindex, the womenswear brand owned by Finnish department store operator Stockmann, has reported positive results in its third-quarter earnings. Despite a 7% decline in overall group revenue to €226.9 million ($254.9 million) and a 1.7% fall in local currencies, the Lindex division managed to increase its revenue by 4.9% in local currencies. However, the reported revenue for the division did decline from €166.9 million to €162.3 million.
In contrast, Stockmann’s performance in the quarter was not as favorable, mainly due to the timing of its Crazy Days promotional campaign. The campaign, which usually starts in September, began in October this year, resulting in a decline in revenue from €77.1 million to €64.7 million. Although the company’s gross margin improved to 58.5% from 56.8%, Stockmann’s adjusted operating profit dropped from €22 million to €20.6 million. The decline in local currencies was slightly smaller.
On the other hand, Lindex saw an increase in adjusted operating profit from €22.5 million to €26.2 million, with a significant improvement in local currencies. However, Stockmann’s adjusted operating result recorded a loss of €4.8 million, compared to a profit of €0.2 million the previous year, primarily due to the timing of the promotional campaign.
Looking ahead, Stockmann expects its full-year revenue to be between €940 million and €1 billion, with adjusted operating profit projected to range from €65 million to €85 million. The company’s guidance takes into account potential fluctuations in foreign exchange rates and anticipates increased costs and a negative impact on consumer demand due to high inflation.
Stockmann CEO Susanne Ehnbåge outlined the company’s priorities, which include improving profitability, establishing a sustainable foundation for the future, and accelerating the growth of Lindex. She highlighted that both divisions are heavily investing in digitalization to meet customer expectations, streamline processes, and enhance cost efficiency.
While Lindex has experienced significant profitability growth in recent years and plans to expand into new markets and sales channels, Stockmann is focused on repositioning itself as a luxury and affordable luxury brand. The company aims to create long-term shareholder value and improve profitability in both divisions.
Useful links:
– Stockmann Official Website
– Lindex Official Website
