Translation: Original published in Finnish on 2/7/2025 at 9:12 am EET.

Lindex Group's Q4 results were clearly stronger than we expected, and the full-year adj. EBIT was in the middle of the guidance range at 75 MEUR, while in January we expected the result to remain below 70 MEUR. For the current year, the company's guidance is for slight growth as expected, with an adj. EBIT of 70-90 MEUR, compared to our forecast of 75 MEUR. There was no new information in the report related to the restructuring or the strategic review. The strong result and the guidance put some upward pressure on our forecasts. 

Revenue slightly positive in local currencies

The Lindex Group's revenue decreased slightly in terms of reported figures but increased by 1% in local currencies. The Lindex division's revenue grew by 1% (2% in local currencies), broadly in line with our forecast. The Stockmann division's revenue decreased by 1%, which was nevertheless slightly better than our expectations and the Finnish market development. In total, revenue exceeded our estimates by 1%.

Result improved year-on-year and clearly exceeded our expectations

The Group's comparable EBIT improved to 36 MEUR (Q4’23: 30 MEUR, Inderes: 31 MEUR) and the full-year result reached the mid-point of the guidance, at 75 MEUR, compared to our forecast of 68 MEUR in January (which we raised slightly before the results as there was no profit warning). The Lindex division's adjusted EBIT was 27 MEUR, well above our expectations (23 MEUR) and the comparison period (22 MEUR). The Lindex division's gross margin was 66.0%, slightly up year-on-year and above our expectations (65.0%). Fixed costs were also lower than expected. This allowed Lindex to improve its performance after a weaker Q3. The Stockmann division's adjusted EBIT was 10.5 MEUR, also better than the comparison period and our expectations (both 9 MEUR), largely due to slightly higher revenue. The reported result was negatively impacted by small one-off costs. There were no major surprises on the lower lines of the income statement.

Guidance around the familiar 80 MEUR

Lindex's adjusted EBIT for both 2022 and 2023 was 80 MEUR and 75 MEUR last year. The guidance for this year is 70-90 MEUR, which means that the earnings level is expected to remain very similar to recent years. Lindex expects revenue to grow by 0-4% in local currencies, although the company expects the market situation to remain challenging, especially in H1. Our forecast has been for 2% growth and an adjusted EBIT of 75 MEUR, so the strong results and guidance put some upward pressure on our earnings forecast. Lindex cannot distribute dividends while the restructuring process is ongoing.

There was nothing new to report on the restructuring process and the strategic review of the department stores. The company also announced today that it will close the Stockmann department store in Itis, Helsinki, in the fall when the lease expires. However, the company said this would not have a significant economic impact. The Itis store was halved in size a couple of years ago and its closure comes as no surprise to us. The store's floor space and revenue impact is small, especially for the group as a whole, and we do not expect the closure to have a significant impact on earnings.