XXL (XXL) Q1 2025 earnings summary

Executive summary

• Achieved 7.2% year-over-year revenue growth in Q1 2025, marking the first quarter of growth since Q1 2023, driven by the Reset and Rethink strategy despite challenging market conditions.

• All three core markets—Norway, Sweden, and Finland—returned to growth, with Sweden leading and e-commerce as the primary growth driver.

• Private label sales share and customer club membership increased significantly, with nearly 4.5 million members.

• The "Reset & Rethink" turnaround plan focused on non-seasonal categories, improved product availability, and new private label launches.

• Rights issue of NOK 600 million completed, with NOK 300 million used to repay bridge loan, strengthening liquidity.

Financial highlights

• Operating revenue reached NOK 1,670 million, up 7.2% year-over-year; like-for-like growth was 7.8%.

• Gross margin was 38.2%, down 0.6 percentage points year-over-year due to end-of-season sales campaigns.

• EBITDA improved to NOK 12.4 million (3.7% margin), with Sweden showing the strongest EBITDA improvement.

• Inventory value increased by 4% to NOK 1,953 million, with inventory volume up 25%.

• Liquidity at quarter-end was NOK 344 million, down NOK 247 million year-over-year due to reduced use of revolving credit facilities.

• Operational cash flow was negative NOK 124 million, mainly due to unrealized FX losses, tax costs, and inventory build-up.

• Net debt reduced to NOK 968 million, with NOK 300 million bridge loan repaid.

Outlook and guidance

• Focus for 2025 is on continued growth, profitability, and disciplined capital and inventory management, with emphasis on "Rethink" initiatives.

• Four main Rethink initiatives: store restructuring, modernizing media mix, delivering value for money, and expanding the customer club.

• Committed to a second phase of cost-out activities targeting an additional NOK 300 million in cost and capital reductions by 2026.

• Turnaround plan targets EBITDA run-rate uplift of NOK 500–750 million, conditional on product availability and positive market trends.

• CAPEX for 2025 expected to remain around NOK 100 million.