Analyst Comment

Hot weather boosted Finnish retail sales in July

Summary

Hot weather in July boosted Finnish retail sales, with Kesko, Tokmanni, and Lindex's Stockmann division seeing a 6% increase, particularly in the clothing trade.
Kesko's consumer sales grew by 4%, below the market's 6% growth, while its B2B sales outpaced the market at 4% versus 2%. We expect Kesko's daily goods trade to grow by 3% in Q3.
Tokmanni's Q3 sales outlook is positive due to non-grocery and grocery goods growth, though margins may be weaker due to discounts. We expect Tokmanni's revenue to grow by 4% in Q3.
Lindex's apparel market grew by 10% in July, but profitability may be affected by discounts. We expect Stockmann's Q3 revenue to decline by 3% due to store closures, despite July's positive growth.

This content is generated by AI. You can give feedback on it in the Inderes forum.

Translation: Original published in Finnish on 9/1/2025 at 8:11 am EEST.

The target market of Kesko’s grocery trade, Tokmanni and Lindex’s Stockmann division, i.e., the department store and hypermarket chains, increased 6% in July. Growth was generated in every sub-segment. Due to the weak Q2 with cool weather conditions, the hot weather in July clearly had a growth-supporting effect, particularly evident in the clothing trade. The early summer season resulted in higher-than-usual seasonal stock levels for certain operators, who we estimate unloaded their excess inventory through discounts already in July. This naturally also supported sales growth.

Kesko's consumer sales continued their negative market share development

Kesko's consumer sales in the daily goods trade increased by 4% in July, which was below market development in the food and daily goods trade (6%). In B2B, Kesko's sales also grew by 4%, while the market grew by 2%. Overall, the business area thus continued to develop along familiar lines, losing market share among consumer customers and gaining it among corporate customers. We expect Kesko's daily goods trade to grow by 3% in Q3, which requires positive development, especially in August when the number of delivery days decreases relative to the comparison period.

Tokmanni received support from the market

Tokmanni is sensitive to seasonal sales patterns in spring and summer, as reflected by the sharp decline in its Q2 result. The positive market development of both non-grocery goods (clothing 10%, home and leisure 7%) and grocery goods bodes well for the company's Q3 sales, although the margin structure of the growth achieved in July was likely weaker than in the comparison period due to discounts resulting from destocking. We expect the Tokmanni segment's revenue to grow by 4% in Q3, which requires positive comparable growth in August-September as well.

Lindex's key apparel market growing rapidly

The apparel market, important for Lindex's Stockmann department stores, grew by as much as 10% in July which is, of course, positive and compensates for the weak spring/early summer. However, July sales may have been driven by discounts, so profitability may have been weaker, at least partially. We expect the Stockmann division's Q3 revenue to decline by 3%, partly due to the closure of the Itis department store in the spring. July's growth remains positive for the quarter's overall outlook/estimates, though we expect the growth rate to even out in August and September. For the first half of the year as a whole, however, the apparel market remains 3% below the comparison period, indicating that the market is relatively sluggish. The Lindex Group's guidance is based on market improvement in H2, with Sweden and Norway, the main markets for the Lindex chain, playing a key role.