Interim reports | Stockmann's result improved at the end of the year – the timing of Crazy Days a decisive factor

Trade group Stockmann's result improved in the last quarter of last year. Sales rose slightly during the Christmas quarter, which is important for the trade sector, although last year was marked by rising interest rates and consumer demand weakened by inflation.

The operating result of the company undergoing corporate restructuring rose to 28.9 million euros in October-December, while a year earlier it was 24.6 million euros.

Stockmann's who started as CEO last May Susanne Ehnbågen according to the reasons for the improvement in the result were, among other things, “strategic focus and prioritization of the most important initiatives”.

“Despite the challenging market environment, which was characterized by persistently high inflation, high interest rates and geopolitical uncertainties, the group managed to improve its profitability,” says Ehnbåge in the company's financial statement release.

Ehnbåge took over as Stockmann's CEO from within the company after leading the clothing store chain Lindex.

Stockmann's turnover in October–December was 274.3 million euros. The increase was 0.6 percent in euros and 3.9 percent in local currencies from 272.6 million euros a year ago.

Tavaratalo's Hullut Päivät sales campaign was scheduled for October this year, while in the comparison period it was in September in the third quarter. In November, on the other hand, the renovation of the Turku department store, which took almost a year, ended.

Stockmann's the share price has risen rapidly during Ehnbåge's managing directorship. At the media and analyst conference, he guessed that the price increase was due to, among other things, the clarity of the strategy and improved sales and profitability.

According to Ehnbåge, the timing of the Hullut Päivät sales campaign was of great importance to the sales development of Stockmann department stores.

That's why this year Hulluja Päivi is not yet in January–March, and the autumn sales campaign will not be held this year until the last quarter of the year, he said.

Stockmann issued a profit warning in November, in which it raised its guidance to full-year adjusted operating profit thanks to Lindex's strong development.

The turnover of Lindex, the largest of Stockmann's two business units, decreased at the end of the year measured in euros.

However, the turnover of Lindex, which sells reasonably priced clothes, increased in local currencies and sales increased in all of the chain's main markets. According to Ehnbåge, Lindex outperformed market growth.

At the press conference, Ehnbågen said that Lindex is looking for new sales channels with new partners for the growth of digital sales.

“TikTok is not at the top, but we are looking at new channels,” he answered a detailed question on this topic.

For luxury and the turnover of premium-focused department stores increased. The timing of the Hullut Päivät campaign had a positive effect on it, but the reduced size of the Itäkeskus department store in Helsinki had a negative effect.

According to Ehnbåde, Stockmann intends to invest even more in luxury and premium brands in its department stores this year.

Such new brands will go on sale during the spring, he promised.

Stockmann's purpose is also to focus even more strongly on regular customers and offer personalized services where digital transactions and transactions in stores are “seamless”, Ehnbåde outlined at the press conference.

Stockmann published its outlook for the current year in the financial statement bulletin. The company anticipates that its turnover this year will increase by 1-3 percent compared to last year, and the adjusted operating result will be 70-90 million euros.

Stockmann anticipates that the market environment will remain challenging. The company estimates that the decrease in consumer demand may affect the trade industry, and disruptions in supply chains and international logistics cannot be ruled out during the year.

The company will not distribute a dividend from last year's result due to the ongoing corporate restructuring.

Stockmann launched a strategic assessment in September to explore alternatives for its department store business and to change its name to Lindex Group. The department stores would continue to operate under the Stockmann brand.

According to CEO Ehnbågen, the evaluation is ongoing. The company is scheduled to complete it this year.

Ehnbåge did not want to comment on the possible sale negotiations of Stockmann's department stores or the idea that the department stores would be separated into their own listed company.

The company's goal is also to complete the corporate restructuring as soon as possible. According to the company, the restructuring process made good progress last year.