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 strategy.

• Launched a new international brand concept, "Welcome to your beauty playground," expected to drive future growth.

• Own brands now represent 7% of sales on a rolling 12-month basis, supporting higher margins.

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, a 32% increase in EBIT value.

• Nordics delivered a 22.7% sales increase, with Norway and Finland leading in growth rate.

• Europe returned to growth at 2.3%, with Poland and the Netherlands as key contributors.

• Inventory to net sales ratio at 14.1%, an all-time low, supporting strong cash flow.

Outlook and guidance

• Continued focus on strategic store openings in the Nordics and business model adjustments in Europe.

• Warehouse extension in Vansbro progressing, with operational impact expected in late 2025.

• Gross margin stabilization targeted through category mix management and buying initiatives.

• Ongoing preparations for the second half of the year, including Christmas campaigns.