Verkkokauppa.com (VERK) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue declined 2.8% year-over-year to EUR 114.2 million amid weak consumer demand and intense price competition.

• Profitability weakened, with EBIT at EUR 0.1 million and comparable EBIT at -EUR 0.7 million; net result at EUR -0.3 million.

• Own brands sales surged 53%, reaching over 8% of sales; fast deliveries up 34% and NPS at a record 83.

• Market share was defended and strengthened despite the challenging environment, with revenue loss less than the second largest competitor.

• Personnel reductions of 33 employees post-period are expected to yield EUR 2.5 million annual savings from 2025.

Financial highlights

• Q3 2024 revenue: EUR 114.2 million (-2.8% YoY); gross profit: EUR 16.6 million (14.5% margin); operating result: EUR 0.1 million; comparable EBIT: -EUR 0.7 million.

• Net result: EUR -0.3 million; EPS: EUR -0.01; equity ratio at 16.3%; gearing at 64.6%.

• Cash at hand: EUR 17.1 million; inventories down 9% YoY to EUR 65.3 million; net debt at EUR 16.3 million.

• Investments in Q3 totaled EUR 0.4 million, focused on technology and digitalization.

• No dividend paid for 2023 to improve equity ratio; new financing arrangements secured until June 2027.

Outlook and guidance

• 2024 revenue and comparable EBIT expected to be lower than 2023 due to weak market and consumer demand.

• No major market recovery expected for the rest of the year; Q4 remains critical due to seasonality.

• Intense price competition and promotional activity anticipated during Black Friday and seasonal sales.

• Recovery in purchasing power anticipated in 2025 as inflation and interest rates ease.

• Guidance includes uncertainties from purchasing power and consumer behavior.