Clas Ohlson jumps after Q3 earnings beat helped by price hikes

Clas Ohlson AB

08/03/2023 08:46

** Shares in Clas Ohlson  CLASb.ST  rise more than 12% after
the Swedish hardware store chain reports estimate-beating Q3
earnings with an analyst underlining positive pricing effects on
gross margin
    ** The company posts Q3 adjusted EBIT of 334 million Swedish
crowns ($31 million), which Handelsbanken Capital Markets says
was 9% ahead of the broker's expectations and Infront consensus
    ** Handelsbanken analyst Nicklas Skogman writes in a note
that Clas Ohlson's gross margin decline was "not as bad as
feared"
    ** "While the negative factors that affected the gross
margin, such as higher sourcing costs and FX headwinds, were of
no surprise, it seems that price hikes and favourable mix
effects may have been more positive than we had expected,"
Skogman says
    ** He also notes strong cash flow improvement and says the
Q3 beat and a likely lift to Q4 gross margin estimates should
drive positive EBIT estimate revisions for the current year
    ** The stock is on track for its best day since December
2021

($1 = 10.7516 Swedish crowns)

 (Reporting by Greta Rosen Fondahn)
 ((Greta.RosenFondahn@thomsonreuters.com))