Sweden's Embellence Q2 sales fall on weak traditional retail
Sweden's Embellence Q2 sales fall on weak traditional retail
Overview
Sweden interior decor firm's Q2 sales fell 6% yr/yr due to weak traditional retail
Adjusted EPS for Q2 was SEK 0.61, down from SEK 0.65 last year
Gross margin rose to 62.3% on higher direct-to-consumer sales and premium products
Outlook
Company continues to focus on direct-to-consumer, hospitality and international expansion initiatives
Embellence says sales through new channels remain a small share of total revenue
Company did not provide specific quantitative guidance for the current or future periods
Result Drivers
TRADITIONAL RETAIL WEAKNESS - Co said sales declined mainly due to weak performance in traditional retail across several brands' home markets
DIRECT-TO-CONSUMER GROWTH - Direct-to-consumer sales continued to grow, with Pappelina up 130% and Boråstapeter launching a new e-commerce platform, but these channels remain a small share of total revenue
GROSS MARGIN IMPROVEMENT - Gross margin rose due to a higher share of direct-to-consumer sales and investments in new premium products
Company press release: ID:nMFN9z1J7z
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Sales | Miss | SEK 181 mln | SEK 191 mln (1 Analyst) |
Q2 Adjusted EPS |
| SEK 0.61 |
|
Q2 Net Income |
| SEK 14 mln |
|
Q2 ADJ-EBIT |
| SEK 23 mln |
|
Q2 EBIT |
| SEK 23 mln |
|
Q2 EBITA |
| SEK 23 mln |
|
Q2 Operating Cash Flow |
| SEK 21 mln |
|
Analyst Coverage
The one available analyst rating on the shares is "buy"
The average consensus recommendation for the home furnishings peer group is "buy"
Wall Street's median 12-month price target for Embellence Group AB (publ) is SEK45.00, about 37.6% above its July 20 closing price of SEK32.70
The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 10 three months ago
Reuters Recommended Reads
July 20 - Sports firm Thule Q2 sales slightly miss estimates; warns of price hike
July 20 - Sweden's Devyser Diagnostics Q2 sales fall on distributor inventory adjustment
July 21 - Chocolate maker Lindt slightly misses H1 sales estimates on weak consumer sentiment
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)