Verkkokauppa.com (VERK) Q3 2023 earnings summary

Executive summary

• Q3 revenue fell 14.7% YoY to €117.4m amid weak demand; gross margin rose to 15.9% from 14.6%, and comparable EBIT increased to €2.2m from €2.1m.

• Pricing, assortment optimization, cost-efficiency actions, campaign improvements and tighter inventory management supported profitability despite lower sales volumes.

Financial highlights

• Q3 gross profit was €18.7m versus €20.1m; net income was €1.1m versus €0.7m, and EPS was €0.03 versus €0.01.

• Q3 EBIT was €2.1m versus €1.7m; comparable EBIT was €2.2m versus €2.1m after €0.1m of comparability items.

• 9M revenue fell 9.3% to €352.2m; gross profit was €57.8m versus €58.7m, and EBIT was €2.9m versus €1.5m.

• 9M comparable EBIT rose to €4.6m from €2.8m, excluding €1.6m of items, including restructuring and acquisition earn-out costs; 2022 excluded €1.3m of acquisition costs.

Outlook and guidance

• FY2023 guidance was unchanged: revenue expected to decline and comparable EBIT to improve versus 2022 revenue of €543.1m and comparable EBIT of €3.5m.

• Consumer and B2B demand was expected to remain soft through the rest of 2023 amid inflation and higher interest rates.

• The earnings-improvement program targets €10m annually, with €5m–€8m expected in 2023; progress through Q1–Q3 was ahead of plan.