Translation: Original comment published in Finnish on 7/2/2023 at 10:12 pm.

The Finnish Grocery Trade Association (Päivittäistavarakauppa ry PTY) reported that the revenue from consumer goods of department store and hypermarket chains (K-Citymarket, Prisma, Sokos, Tokmanni, Minimani and Stockmann) grew by 1% in May from the year before. The total revenue of the chains grew by 7.5%, driven by the growth of over 10% in grocery trade. Of the consumer goods product groups, clothing sales grew by 3% and home and leisure goods by 1%. In April-May, clothing sales growth was 6%, home and leisure goods 2%, and all consumer goods 3%. We consider the development good in clothing where the figures for the comparison period were relatively high, but for home and leisure goods growth was more modest.

Market development better than our Q2 estimate for Stockmann's department stores

For Stockmann's department stores clothing is clearly the biggest product group, and so we believe that strong growth in this product group will support Stockmann. Good clothing demand also supports Lindex, although clothing store figures are not included in these statistics. Our estimate for Stockmann department stores' revenue growth is 1% in Q2, so the quarterly trend to date, at least in terms of the market, seems better than our expectations. However, Stockmann's figures are depressed by the decrease in the floor area of the Itis department store.

For Tokmanni, market development was slightly below our expectations in May

For Tokmanni, the slower market growth rates in May are slightly weaker than our expectations, as we have modeled a 6% revenue growth for Q2. We believe that Tokmanni has grown close to the market growth rate, even though it also has many other consumer goods in its selection than clothing with the strongest growth. At least the spring season for garden products that is important for the company has so far been better in April-May than last year. Thus, we expect a reasonably good quarter from the company and estimate that adjusted EBIT will be better than in the comparison period in Q2 after a respite of six quarters.