Release Date: July 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lindex Group PLC (FRA:SOMB, Financial) reported a positive revenue growth with strong momentum towards the end of the quarter, particularly in digital channels.
- The Stockman division marked its fifth consecutive quarter of improved results, demonstrating successful operational and organizational efficiency measures.
- The ramp-up of Lindex's new omni-channel distribution center is progressing well, with plans to handle e-commerce orders through the new warehouse.
- Lindex continues to lead in women empowerment across all markets, highlighting its commitment to gender equality and development.
- The company has made significant progress in sustainability, with 75% of all Lindex products now containing partly recycled fibers, up from 55% last year.
Negative Points
- The second quarter was impacted by a challenging market environment, with economic uncertainty and geopolitical tensions affecting consumer confidence.
- Lindex's adjusted operating result decreased significantly due to a lower gross margin, influenced by increased promotional activities and higher inventory levels.
- The fashion market remained volatile, with a delayed and cold start to summer weakening the demand for seasonal fashion.
- The group's gross margin declined significantly to 58% compared to 60% in the previous period, impacting overall profitability.
- The ramp-up of the new omni-channel distribution center led to temporary supply delays and higher logistic costs, affecting stock availability and revenue.
Q & A Highlights
Q: Considering the revenue development in Q2 and the first half year, do you expect to meet your guidance?
A: Yes, we have accounted for the challenging market environment in our 2025 outlook. We expect a gradual improvement in consumer confidence and economic recovery in the second half, which, along with our operational improvements, should help us meet our guidance.
Q: How did the Lahitapula settlement impact the Q2 financial results?
A: The settlement improved the group's operating result to EUR25.5 million, influenced by the release of a partial restructuring provision from May 2022. However, the compensation was treated as restructuring debt and did not affect the adjusted operating results.
Q: How did the fashion market develop in Q2, and were there differences between markets like Sweden, Finland, and Norway?
A: Finland experienced a negative trend, especially in May. Sweden saw a decline in April but improved by June. Norway had negative developments in April and May. Despite these challenges, Lindex outperformed the market in local currencies.
Q: Is there any progress in determining the future of the Stockman department store?
A: The strategic assessment is ongoing, and we are exploring alternatives for the Stockman department stores. We will provide updates as the assessment progresses.
Q: What is the status of the new omnichannel distribution center, and when will it be fully operational?
A: We are currently testing e-commerce orders through the new center. Full operations are expected in 2025, with anticipated savings and efficiency improvements starting in 2026.
Q: Why was there a divergence in growth between Lindex's in-store and digital revenues?
A: Stock availability impacted stores more than e-commerce, where we maintained higher stock levels. Additionally, consumer preference for digital channels may have contributed to this trend.
Q: Are there any expected benefits from the weakened US dollar on your gross margin?
A: Yes, the positive development of the US dollar is expected to benefit our gross margin towards the end of this year and into early 2026.
Q: Have you started any cost adjustment measures due to the weak first half of the year?
A: Yes, we have implemented cost adjustment measures in both divisions to align with the revenue performance and maintain our full-year guidance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
