Translation: Original published in Finnish on 12/10/2025 at 9:28 am EET.

Source: Inderes & Bloomberg (consensus, 4 analysts)

Puuilo’s actual Q3’25 aligned with our expectations especially in terms of earnings. The rapid sales growth is attributable to the record-fast expansion of the store network and moderate like-for-like growth. Product margins also developed positively, while fixed expenses were higher due to growth investments. Earnings grew in line with revenue. The guidance for the financial year was revised, though there was no significant change in the midpoints of the range. Although Q3 earnings were strong, as usual, it is difficult to imagine the stock rallying in response to the report due to the high expectations for Q4. At the same time, we are seeing slight downward pressure on earnings expectations, which were at the upper end of the guidance range, at least for Q4.

Concept is still attracting new customers

Puuilo's Q3 revenue grew by 14% to 116 MEUR. The result was roughly aligned with our expectations (Inderes 114 and consensus 118 MEUR). Revenue growth was driven by new stores (+7 y/y) as well as by like-for-like growth (2%) picking up slightly from the last quarter. The number of customers also increased both for the entire network (16%) and comparable stores (5%), indicating the appeal of the Puuilo concept. Consequently, the average purchase amount decreased, which in turn suggests that consumer behavior remains cautious. E-commerce sales declined by one percent, although in euro terms, this is a marginal (~2%) part of the company's business. We estimate that the company has continued to gain market share, largely due to a combination of an attractive concept and a low price level.

Earnings at a good level in line with expectations

The Q3 EBITA increased from the comparison period to 22 MEUR (18.8% of revenue), broadly in line with expectations (Inderes 22 MEUR and consensus EBITA* ~23 MEUR). The improvement in earnings was driven by both volume growth and a positive development in product margins. In our view, robust growth of own brands, as well as changes in the sales mix, supported the approximately 0.6 percentage point improvement in the gross margin (38.6%). Earnings growth in turn was limited by fixed expenses, which grew faster than revenue due largely to new store openings and wage inflation. Lower expense lines were in line with our estimates. In the big picture, higher earnings per share (EUR 0.19) than in the comparison period (EUR 0.17) were due to an improved operating result, which was in line with expectations (Inderes EUR 0.19 and consensus EUR 0.20).

Expectations at upper end of updated earnings guidance

The company revised its guidance ranges at both the upper and lower ends, but without significantly changing the midpoint of the ranges. The new guidance indicates that revenue will be between 430 and 450 MEUR (previously 425-455) and adj. EBITA between 72 and 79 MEUR (previously 70–80). Based on actual results thus far this year and the new guidance, EBITA for Q4 is projected to be in the range of 11–18 MEUR. Our pre-earnings Q4 forecast is 17 MEUR, which seems somewhat bold in light of the new guidance. The consensus, on the other hand, expects Q4 EBITA* of around 18 MEUR, which is at the upper end of the new guidance. We will assess the Q4 outlook during the course of the day, but according to our preliminary estimates, there may be some downside to consensus Q4 forecasts. In terms of market commentary, the company's management was somewhat pessimistic, although weak markets have not previously had a significant impact on the company's performance.

* Exact consensus figure unknown