Lindex Group

We discontinue our coverage of Lindex Group as the company has terminated its research service agreement. Due to the termination of coverage, we no longer issue a recommendation (was Buy) or target price (was 3.50 EUR) for the share.

The August figures for the Swedish clothing market were published this morning. According to Svensk Handel, sales were up 6% from last year. Market development has been clearly positive during the summer months.

Lindex announced today that the corporate restructuring program that began in April 2020 has ended. The company announced in June that it had settled the last disputed debt, and thus the completion of the restructuring had only been awaiting a technical formality, which has now been obtained.

The July figures for the Swedish clothing market were published this morning. According to Svensk Handel, sales were up 4% from last year.

Although Lindex's Q2 result was weak, the company reaffirmed its guidance to achieve an adjusted EBIT of 70-90 MEUR for the full year. We expect 66 MEUR, so we anticipate a reduction in guidance.

Lindex Group's Q2 result missed the comparison period and our estimates. The Lindex division's gross margin decreased a bit more than we expected from a strong comparison period, and at the same time, revenue was slightly weaker, but fixed costs were higher than we expected.