Stockmann, the parent company of Lindex, has announced its third-quarter and nine-month financial results. While the company experienced revenue growth and achieved break-even for its Stockmann division, it faced challenges in terms of declining margins and profits.
In the third quarter, Stockmann’s revenue increased from €237.8 million to €244 million, representing a 4.2% growth in local currencies. However, the gross margin decreased from 59.5% to 56.8%, and adjusted operating profits dropped from €32.9 million to €22 million. Overall, the operating result for the quarter was €6 million, a significant decline from €32.7 million the previous year, and net profit went down from €22.9 million to €0.6 million.
Although the company experienced challenges, its revenue for the nine-month period increased to €709.1 million, a 15.4% growth in local currencies. Nonetheless, the gross margin also saw a decline, albeit less significant, falling from 59.1% to 58.1%. Adjusted operating profit rose from €38.6 million to €53.7 million, and reported operating profit increased from €31.5 million to €130.3 million. Net profit also saw a significant rise from €12.6 million to €84.1 million.
Stockmann remains optimistic about its future performance and maintains its guidance, expecting an increase in revenue and improved operating results compared to the previous year. The company’s projection is reliant on consistent consumer spending and overcoming challenges related to higher inflation and disruptions in the supply chain. CEO Jari Latvanen attributes the company’s growth to increased sales and higher average purchases. Despite challenges faced in the third quarter, the Stockmann division managed to improve its gross margin, while Lindex’s gross margin declined due to unfavorable exchange rates. Stockmann anticipates future growth through stabilizing inflation rates and ongoing investments.
The weaker profitability in this period can be attributed to factors such as strategic growth expenses, exchange rate fluctuations, and normalizing costs. Furthermore, comparisons with last year’s exceptional results made this quarter appear comparatively weaker. While the Stockmann division achieved a positive adjusted operating profit in the third quarter, and Lindex delivered good results, these figures fell short of the outstanding performance from the previous year. Additionally, the inclusion of one-off provisions impacted the overall results.
Stockmann has confirmed that its restructuring process is on track, with all department store properties sold and all interest-bearing debt, except for a €67.5 million bond, being paid off.
Useful links:
– Stockmann Investor Reports
– Lindex Investor Communications
