Puuilo (PUUILO) Q3 2024 earnings summary

Executive summary

• Q3 net sales rose 10.8% year-over-year to €102.2 million, driven by strong customer traffic growth despite a 3.4% decline in average basket size.

• Adjusted EBITDA/EBITA for Q3 was €19.7 million (19.2% of net sales), up 28.9% year-over-year, with EPS rising to €0.17.

• For the first nine months, net sales were nearly €300 million (+14%), with adjusted EBITDA/EBITA up 21.4% to €53 million and EPS at €0.45.

• Seven new stores opened in the financial year, bringing the total to 47, exceeding strategic targets and supporting expansion.

• Growth was mainly driven by increased customer traffic in both new and existing stores.

Financial highlights

• Q3 like-for-like sales were flat (-0.4%) due to lower basket size, but customer traffic grew 2.5% LFL and 14.7% overall.

• Gross margin improved to 38% in Q3, up 2 percentage points year-over-year, supported by private label sales and a favorable sales mix.

• Operating free cash flow in Q3 was €10 million, down from €14 million, mainly due to inventory build-up for new stores and private label imports.

• Net income in Q3 was €14.5 million, with cumulative EPS for the first three quarters at €0.45, over 20% higher year-over-year.

• Inventory increased to €108.2 million, mainly due to new store openings and higher private label imports.

Outlook and guidance

• Full-year net sales forecasted at €380–400 million, with adjusted EBITDA/EBITA expected between €60–66 million.

• Guidance reflects uncertainties from inflation, interest rates, labor strikes, and geopolitical risks.

• Q4 expected to follow typical seasonal trends, with no major changes anticipated in gross margin.

• Long-term targets: net sales above €600 million by FY2028, adjusted EBITA margin above 17%, and net debt/adjusted EBITDA below 2.0x.

• Recovery in purchasing power and demand expected in the latter half of next year.