Kjell Group (KJELL) Q3 2024 earnings summary

Executive summary

• Net sales for Q3 2024 were MSEK 624.3, down 4.1% year-over-year, with gross profit at MSEK 252.5 and adjusted EBITA at MSEK 21.0, corresponding to a 3.4% margin.

• The quarter was marked by cautious consumer behavior, intense promotional activity, and a challenging market environment.

• Efficiency improvements and strategic focus on own brands and operational efficiency supported positive EBITA despite margin pressure.

• Year-to-date net sales increased 0.7% to MSEK 1,810.1, but net profit for the period was MSEK -35.9.

• Cash flow from operating activities was negative in Q3, mainly due to increased inventories.

Financial highlights

• Q3 net sales declined 4.1% year-over-year to MSEK 624.3; gross margin decreased to 40.4%.

• Adjusted EBITA margin for Q3 was 3.4%, down from 6.6% last year.

• Financial net debt increased by MSEK 48 quarter over quarter; leverage ratio rose to 5.7x LTM Adjusted EBITDAAL.

• Online sales accounted for just under 30% of total sales.

• Cash and cash equivalents at period end were MSEK 71.8, down from 196.3 at start of year.

Outlook and guidance

• Entering the seasonally strongest quarter with expectations of improved performance, supported by new campaigns and a stronger lineup of own brands.

• Management remains focused on efficiency, cost control, and defending market share in a cautious consumer environment.

• Long-term targets include net sales ≥ SEK 4 billion by 2025, adjusted EBITA margin of 8%, net debt/adjusted EBITDAAL <2.5x, and dividend payout ≥60% of net profit.