Translation: Original published in Finnish on 9/11/2026 at 8:15 am EEST.

Puuilo reported the main points of its Q2 results and raised its guidance already last week. The print was strong as expected with all drivers developing in a positive direction. We marginally raised our estimates and the target price to EUR 18 (was EUR 17.5). We reiterate our Accumulate recommendation, supported by a strong earnings growth outlook and a good dividend yield. 

Q2 was in line with previous data, and the gross margin remained strong

Puuilo's Q2 revenue grew by 13% year-on-year to 153 MEUR, as previously announced. Revenue growth was supported by the expansion of the store network and 6% growth in like-for-like stores. Adj. EBITA rose to 34 MEUR (Q2'25: 28 MEUR), corresponding to 22% of revenue, whereas our pre-upgrade forecasts expected 33 MEUR and a margin of just over 21%. The earnings improvement was supported in particular by the strengthening of the sales margin, as the margin improved by exactly one percentage point to 39.2%. This level was also better than our estimate (38.4%). According to management, the gross margin was supported in particular by the increased share of private label products in sales. Fixed costs grew more slowly than revenue and were in line with our expectations. This once again demonstrated the effectiveness of the company's scalability. We commented on the result in more detail here.

Last week's guidance raise was expected, forecasts only up marginally

Puuilo raised its full-year outlook in a positive earnings revision already published on September 1. It forecasts the revenue for the financial year 2026 to be 495–515 MEUR and the adjusted EBITA to be 87–97 MEUR. We raised our forecasts for this year and the coming years by 1% in this report. We now forecast revenue to land at 510 MEUR and adj. EBITA at 94 MEUR, which is slightly above the midpoints of the guidance ranges. Regarding store openings, the company reiterated its target for Finland to open eight stores this year, plus one in Sweden, as announced in the summer.

We expect the company's growth to continue largely in line with its targets

Puuilo targets average annual growth of 10% and revenue of over 800 MEUR by the end of 2030. In addition, it targets an adj. EBITA of over 17%. Our forecasts are practically in line with the company's targets, even though the expansion into Sweden will dilute profitability in our forecasts over the next few years. The majority of growth during the strategy period will continue to come from new stores in Finland and like-for-like store growth. The company's growth is extremely capital-light and returns on capital are good. As such, the company's growth is clearly value-creating.

Strong earnings growth drives the expected return to a sufficient level

The company's earnings multiples for the current year are rather high in absolute terms (e.g., P/E 21x). However, this is justified as we expect the company to deliver strong earnings growth in the coming years, which will drop the multiples to levels that are attractive for a growth company (2027-28e P/E 16-18x and IFRS 16 adj. EV/EBIT 13-14x). Taking into account our earnings growth forecasts of about 15%, valuation multiples that are slightly elevated on actual earnings, and a 5% dividend yield, the expected total return on the stock is around over 10%. We find this level sufficient, and it exceeds our required return. The EUR 18 per share implied by our cash flow model also suggests small upside and justifies a positive view on the stock. We see Puuilo as one of the highest quality companies in the sector, with a concept that has proven its competitiveness in both favorable and challenging markets.