Q1 is tough for Lindex Group as fashion sales weaken
The Finnish company owns the international Lindex brand and the Finland/Baltics-focused Stockmann department stores chain.
The first three months of 2025 saw revenue falling to €186 million from €192.8 million, a decline of 3% in local currencies. Despite the Lindex division having been a stronger performer in recent periods, in the latest quarter the revenue of both divisions was dented by lower consumer confidence 'and continued fashion market volatility'. And like all companies, it faced one particular challenge this year with the first quarter of last year having had an extra trading day due to it being a leap year.
What did all this mean in numbers? Lindex division revenue fell to €126.3 million from €130.6 million. That was a 3.3% overall decline and 2.5% in local currencies. It was partly affected by temporary supply delays related to the extensive ramp-up process of the new omnichannel distribution centre.
The Stockmann division's revenue fell by 3.9% to €59.8 million from €62.2 million, mainly due to a decrease in fashion category sales.
While the group's gross margin improved to 57.4% from 56.3%, its adjusted operating result fell to a loss of €8.7 million, which was wider than the loss of €6.5 million in the previous year's Q1.
The Lindex division's adjusted operating result was a loss of €0.3 million from a profit of €4.2 million in the previous year, due to the decrease in revenue and higher operating costs. Yet Stockmann's adjusted operating result improved. That said, it remained loss-making on this basis, the figure narrowing to a loss of €7.3 million from one of €9.4 million 'due to successful cost efficiency measures'.
The overall operating loss widened to €9.5 million from a loss of €7.6 million the year before and the net loss also widened to €20.2 million from €15.4 million.
For this year as a whole, Lindex Group expects its revenue to increase by anywhere from 0% to 4% in local currencies compared to 2024. The Group's adjusted operating result is estimated to be positive, in a range of €70 million-€90 million.
The company said the macroeconomic situation in its main markets is estimated to remain challenging, especially during the first half of the year. Continuing geopolitical uncertainty, together with the increased risks for global trade disturbances, 'may have a negative impact on the economic recovery'. But there remain a lot of unknowns about the rest of 2025.
It said that towards the latter part of the year, economic growth might accelerate if interest rates continue to decline and inflation remains stable. Increasing purchasing power of households may gradually start supporting favourable development of consumer demand. However, the situation may vary between the group's markets. Disruptions in supply chains and international logistics during the year can also not be excluded.
CEO Susanne Ehnbåge said that in Q1, it 'made good progress in executing the strategic initiatives to accelerate the future growth and value creation of the company'.
In the Lindex division, it 'continued the extensive ramp-up and transition phase of the new omnichannel distribution centre which enables us to execute our long-term growth plans and future-proof our logistics operations. In addition, the important digital transformation efforts of the Lindex division progressed well with ongoing enhancements of customer-facing touchpoints and enhanced internal capabilities. The number of active customers increased for both divisions, and the Lindex division continued to expand its international presence by, for example, launching a new Lindex Kids store in London'.
In the Stockmann division, the efforts to improve operational and organisational efficiency 'paid off and the division's first quarter result improved, marking the fourth consecutive quarter of improvement'.
It also continued developing Stockmann's strategic omnichannel approach, 'making the interaction of digital and physical channels as seamless as possible for our customers. We entered new concession partnerships to complement and elevate our own offering with new unique products, services and experiences'.
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