New Wave Group (NEWA) Q2 2025 earnings summary

Executive summary

• Organic growth in local currencies reached 1.3% in Q2, below the 3-4% target, due to tough market conditions, negative calendar effects from Easter, and currency headwinds.

• Net sales in SEK decreased by 4.1% in Q2 to SEK 2,300 million, mainly due to negative currency effects.

• Market share increased and the acquisition of Cotton Classics was finalized, strengthening presence in Central Europe and opening new opportunities in Eastern Europe.

• Continued investments in warehouse automation, IT, and marketing, impacting short-term earnings but supporting future growth.

• Operating profit and net income declined year-over-year, reflecting challenging macroeconomic and currency conditions.

Financial highlights

• Q2 net sales: SEK 2,300 million (down 4.1% year-over-year); organic growth 1.3% in local currencies.

• Q2 operating profit: SEK 241 million (down from SEK 301 million); operating margin: 10.5% (down from 12.6%).

• Q2 net income: SEK 167 million (down from SEK 210 million); EPS: SEK 1.26 (down from SEK 1.59).

• Gross profit margin for H1: 48.9% (down from 49.3%).

• Cash flow from operating activities for H1: SEK 368 million (down from SEK 541 million); Q2 cash flow: SEK 150 million (down from SEK 337 million).

Outlook and guidance

• Management expects to benefit from increased market share and strategic acquisitions once market conditions improve.

• Continued focus on gaining market share, brand development, and investing in infrastructure, automation, and marketing.

• Anticipate gradual improvement as client inventory levels normalize and market sentiment turns positive, but timing remains uncertain.