Lyko (LYKO-A) Q2 2024 earnings summary

Executive summary

• Net sales grew 21.9% year-over-year in Q2 2024 to 879.6 MSEK, with sales accelerating compared to Q1 and EBIT margin improving to 1.9% from 1.7%.

• Strong growth in the Nordics, with Europe showing modest gains; strategic investments in stores and organization ongoing.

• Opened a new store in Turku, Finland, and reopened/relocated key stores in Oslo and Malmö, supporting omnichannel expansion.

• Launched a new international brand concept and completed acquisition of remaining 60% of Loveli Beauty AB.

Financial highlights

• Q2 net sales: 879.6 MSEK (721.4 MSEK in Q2 2023); sales growth 21.9%.

• EBIT margin improved to 1.9% from 1.7% year-over-year, with EBIT up 32%.

• Gross margin: 43.1% (43.8% in Q2 2023); held steady versus Q1 but declined year-over-year due to category mix.

• Cash flow from operating activities: 82.8 MSEK (-8.6 MSEK in Q2 2023); inventory to sales ratio at an all-time low.

• Investments in tangible and intangible assets: -61.3 MSEK, mainly for warehouse automation and new stores.

Outlook and guidance

• Continued investments in organization, infrastructure, and strategic store openings in the Nordics and Europe.

• Vansbro warehouse automation project is on schedule, with operational impact expected in late 2025.

• Own brands now represent 7% of sales on a rolling 12-month basis, with sequential increases expected to support margin expansion.