Puuilo (PUUILO) Q2 2024 earnings summary

Executive summary

• Net sales grew 14.9% in Q2 and 15.4% in H1 year-over-year, reaching €119.9M and €195.4M, driven by strong customer traffic in both new and existing stores.

• Adjusted EBITA increased 18.7% in Q2 and 17.3% in H1, with margins expanding to 20.7% and 16.9%, supported by favorable sales mix and private label growth.

• Four new stores opened in H1, including conversions from the Hurrikaani transaction, bringing the total to 46; customer traffic rose 18.2% in Q2 and 18.4% in H1.

• Gross margin improved to 37.6% in Q2 and 37.2% in H1, supported by lower logistics costs and increased private label sales.

• Online store net sales grew 10.6% in Q2 and 3.9% in H1, reversing prior declines.

Financial highlights

• Q2 net sales: €119.9M (+14.9% y/y); H1 net sales: €195.4M (+15.4% y/y); like-for-like sales up 2.1% in Q2 and 3.1% in H1.

• Q2 adjusted EBITA: €24.8M (margin 20.7%); H1 adjusted EBITA: €33.0M (margin 16.9%).

• Q2 EPS: €0.22; H1 EPS: €0.28.

• Operating free cash flow: €31.7M (Q2), €33.9M (H1); cash and equivalents at period end: €32.2M.

• Inventory at €100.9M, reflecting new store openings and private label expansion.

Outlook and guidance

• 2024 net sales forecast narrowed to €380–400M (previously €380–410M); adjusted EBITA guidance set at €60–66M (was €60–70M).

• Guidance reflects H1 performance and current market outlook; uncertainty remains due to inflation, VAT changes, interest rates, strikes, and geopolitical risks.

• No expectation of basket size increase in H2; personnel cost ratio to net sales expected to be lower year-over-year.

• Long-term targets: net sales above €600M by FY2028, adjusted EBITA margin above 17%, payout ratio at least 80% of net income, net debt/adjusted EBITDA below 2.0x.

• Risks include changes in purchasing power, inflation, interest rates, VAT changes, and geopolitical events.