Nelly Group (NELLY) Q3 2024 earnings summary

Executive summary

• Net revenue for Q3 2024 grew by 1.4% year-over-year to SEK 239.6 million, with profit after tax of SEK 22.3 million and EPS of SEK 0.74, driven by lower return rates and higher own-brand sales.

• Gross margin improved to 54.5% from 50.7% year-over-year, supported by reduced campaign activity and a higher share of own-brand sales.

• Operating profit rose to SEK 25.1 million (10.5% margin), up from SEK 12.8 million (5.4% margin) in Q3 2023.

• Own brand share increased to 45.2% from 39.4% year-over-year, strengthening core categories and full-price sales.

• Transformation efforts and operational improvements led to healthier business KPIs and profitability.

Financial highlights

• Q3 2024 net revenue: SEK 239.6 million (+1.4% YoY); gross profit: SEK 130.7 million (gross margin 54.5%).

• Operating profit: SEK 25.1 million (margin 10.5%); profit after tax: SEK 22.3 million.

• Cash and cash equivalents at 30 September 2024: SEK 190.4 million, with no short-term credit utilized.

• Cash flow from operations in Q3: SEK -18.5 million, mainly due to inventory buildup for autumn/winter.

• Investments in non-current assets totaled SEK 3.1 million, mainly for IT and technology projects.

Outlook and guidance

• Continued focus on profitable growth, increasing own brand share, and maintaining a strong cash position.

• Ongoing IT system optimization and infrastructure investments expected to continue into 2025.

• Inventory levels considered healthy heading into Q4, with expected benefit from Christmas trade.

• Emphasis on customer experience and long-term improvements.