Pierce Group (PIERCE) Q3 2025 earnings summary

Executive summary

• Achieved 17% year-on-year revenue growth in Q3 2025 (20% in local currency), with net revenue reaching SEK 427 million, driven by improved stock availability and strong demand.

• Maintained a leading pan-European presence in motorcycle gear e-commerce, expanding from 20 to 28 markets, and increased sales per FTE by over 80% since Q2 2023.

• Transformation program (Pierce 2.0) and major IT upgrades are underway, focusing on operational efficiency, customer experience, and scalability, with completion expected by end of Q1 2026.

• LTM revenue growth reached 16%, with profitability and scalability momentum following post-Covid challenges.

• Strategic investments in IT and inventory expansion supported growth but temporarily impacted gross margin and cash flow.

Financial highlights

• Q3 2025 net revenue: SEK 427 million (+17% YoY); adjusted EBIT improved to SEK 11 million from SEK 0 million, despite SEK 13 million in obsolescence and SEK 6 million in transformation costs.

• Gross margin declined to 40.1%, down 5.5 percentage points year-over-year, mainly due to obsolescence provisions and targeted price reductions.

• Ended Q3 with SEK 161 million in cash, down from previous year but still solid; cash flow was negative due to VAT payment and prepayments to suppliers.

• Overhead costs reduced by SEK 5 million year-over-year to SEK 61 million, despite SEK 6 million in transformation expenses.

• Net working capital increased to SEK 234 million, reflecting inventory build-up for peak season.

Outlook and guidance

• No specific guidance provided, but management remains positive about Black Friday, citing strong inventory and readiness.

• Transformation costs and trademark amortization expected to decline from Q2 2026, unlocking SEK 30–40 million in annual EBIT improvement.

• Growth from transformation phase expected to moderate; new growth to come from market and vertical expansion (MTB, moped/scooter).

• Medium to long-term targets: outgrow the European online motorcycle gear market, achieve 5–8% adjusted EBIT margin, and maintain net debt/EBITDA below 2.0x.

• Positioned to benefit from market consolidation as the only pan-European, listed player.