Clas Ohlson (CLAS-B) Q4 2025 Earnings – Full Coverage

Welcome to the Clas Ohlson Q4 2025 report presentation. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Christopher Tonstrom and CFO Pernilla Walfridsson. Please go ahead.

Thank you. Good morning everybody and welcome to the Clas Ohlson Q4 report presentation. My name is Christopher Tonstrom. I'm the president and CEO, and with me today I have Pernilla Walfridsson, our CFO. So we will go through a short business update. Pernilla will take us through the financial development, and then we will go through the events after the reporting period and update about the strategy and then summarize before we move into Q&A. So headlining the fourth quarter but also the year, we can conclude that we're closing a strong quarter and also strong year with Q4 sales amounting to 2.3 billion, which is organic growth representing 10%, and online sales growth of plus 19%. Q4 operating profit came in at 109 and the margin at 4.6%. So all in all, we're closing a year with total sales of 11.6 billion and a profit of almost 1.2 billion, translating into an operating margin of 10.1%. From a cash flow point of view, we closed at 1.8 billion, which is also up versus last year, and we can conclude that the solid financial position remains. Our earnings per share came in at 13.91 kronor, which is up from 8 kronor last year, and the board has recommended a proposed dividend of seven kronor. We also see a solid start to the new year. We reported our May numbers today, and I'll come back to those in a second, but we can conclude that we delivered 8% organic growth also in May.

So moving into the business update. First of all, we launched our updated strategy back in 2022 and we are executing on this. Overall, we see three areas where we believe we do have a competitive advantage and we are investing in making those stronger: that's our assortment, our brand, and our customer meeting. And looking ahead and also looking at how we operate, we are leveraging this in terms of really focusing in on five distinct product niches where we want to be best. We also do everything to make our platform more scalable and efficient and ensure that we are cost competitive. And then the ambition is to always generate a strong free cash flow so we can reinvest into our ABC. We can also conclude that we're closing a year where we have delivered above our financial targets, both when it comes to sales and margin, and also the board recommendation in terms of the dividend amounts to 50%.

Looking then at the quarter and some events from the quarter. Overall, we have had three growth drivers we've been focusing on this year and also for the fourth quarter, we see that they are producing results. The first one is on the assortment side where the ambition is to be relevant 12 months a year, and in the fourth quarter we can conclude that all the five product niches are growing and they have been growing across the year. Our ambition is that these five niches together represent what we call an all-weather portfolio which gives us a lot of flexibility, a lot of relevance, not taking into account what's happening outside of the company. And also this year we have had a high pace when it comes to launching new products. So for the full year we have launched almost 5,000 new products and that keeps driving relevance for the brand. The second area is our online business. We do have a profitable and growing online business and we have seen online sales growth in the quarter amounting to 19%, and online now represents 21% of our total business. Last but not least, when it comes to the store network, we can also conclude the strong like-for-like development throughout the quarter but also for the year. And in the fourth quarter, we also opened three new stores and also did some reopenings of refurbished stores. And the ambition as we are moving into year 2526, the ambition is to continue the store expansion and we estimate that it will be in line with the last two years, so approximately 10 stores looking ahead.

As we're working on these growth drivers, it's crucial for us to ensure that we're always relevant when it comes to our customer communication. We do see in our data that our customers are more and more associating with our five niches and that is across the markets. We are also disciplined in terms of ensuring a competitive cost base. We are a more efficient organization that keeps things extremely simple and it's really a way for us to enable growth initiatives and also a continuously strong margin. On the sustainability agenda side, we came out as the industry winner of the Sustainable Brand Index for 2025. But we also see that our spare part sales within Clas Ohlson is growing 26% now in the last year, which is very much in line with our sustainable business model where the ambition is to sell products that consumers really need, that they will use the products for a long time, and if something happens we should also have a spare part. Looking then at customer relevance and satisfaction. This is an overview on how we're performing on our ABC. So starting on the assortment side, we do get a lot of product reviews from our customers and we are consistently above four on a one to five scale. So thousands of product reviews and the customers really appreciate the assortment. When it comes to affordability, we are affordable versus also low price benchmarks out there. So we are delivering on our value for money promise which is extremely important. And last but not least, customer satisfaction remains at very high levels, closing the quarter at 59 NPS and we have been consistently between 55 and 60, which is a very high level. Then the last point is that when it comes to our product niches, and I'll come back to this a bit as we look ahead, but all five are growing and we do believe it is a competitive advantage for us that we are broad-based, we have many legs to stand on, and it gives us an opportunity to be relevant no matter external circumstances, and it also gives us flexibility to focus in where the customers are most interested. So all in all, five product niches are growing. So with that I'll hand over to Pernilla to take us through the financial development.

Thank you very much, Pernilla. So looking at the May sales development, we announced the main numbers also today together with the report and we can conclude that organic growth came in at 8%. And it was growth broad-based across the three countries with Norway coming out the strongest. At the same time, we also see that this is coming on top of last year's 13% organic growth. So it presents a solid start to the new year. The store network increased nine stores compared to last year's May. Then moving into the dividend, the board has today proposed a dividend of seven kronor per share and it will be distributed in two payments of 3.50 each in September and January, and this has been enabled by a strong EPS development and it's also in line with the dividend policy. So that all in all means that we will distribute 444 million to our shareholders based on the reporting day period.

So with that, moving into just looking ahead a little. First of all, starting with the strategic position, the strategy is working so we will continue to execute on this strategy. We also see that the multi-niche strategy of focusing in across five different areas is delivering strong results. So we're going to continue to work to execute on this also moving forward, and we have also done some work to conclude what the market opportunity is, taking into account these five niches from a market point of view, also some of the adjacent product segments that we're playing in. And the conclusion is that the overall addressable market for Clas Ohlson is 340 billion Swedish kronor and it's expected to grow over the next few years. So with our 11.6 billion SEK sales, it amounts to a 3.4% market share. So we do see continued growth opportunities in our core markets Sweden, Norway and Finland, which these numbers are based on. Also if you look at the business from a population or membership point of view, we can also conclude that Club Clas is growing. We've added 500,000 new members over the last year and is closing in on six million members, which represents approximately a fourth of the population. So there's still a big opportunity when it comes to attracting more and new customers into Clas Ohlson.

Then looking at the more concrete growth drivers for the year ahead, we continue to focus on our assortment, continuously driving profitable growth online, and also investing in building a stronger and more robust store network with a combination of investing in the network we have but also adding new stores, and obviously underlining the importance of keeping a competitive cost base, not adding overhead cost. Also continuously doing good work when it comes to efficient customer communication to attract new customers into Clas Ohlson and also serving the customers that are very, very loyal. All in all, we're also continuously working on our sustainability agenda and it's very much built into the overall strategy for the company and it's part of our DNA. So summarizing and looking ahead, I think we can conclude that there is a clear path to continue growing and continue creating value. So first of all, we are well positioned in large and growing product niches. As I outlined, the addressable market is 340 billion SEK and we have a strong brand with almost 90% brand awareness. Second, we continue to focus on needs-driven product assortment and we are doing everything to maintain a very high customer satisfaction every day in our stores and online and in customer service. So all in all, we are renewing the assortment with approximately 30% every year and we have done so over the last two years. Our NPS remains high but it's something you need to deserve every single day, and today it's at 57. Also when it comes to customer satisfaction with our products, it also remains high and we're going to do everything to keep that high, securing the right combination between high quality products that are built to last with a good, attractive price point. And the third area is that we do have central store locations and we have a full-scale e-commerce that is growing and is profitable, and we are effectively working with marketing. So this combination actually makes us fairly unique in the market. We do have 241 stores today and we expect that to continue to grow. Almost 20% of sales now online and we have seen a strong online development over the last few years with 16% CAGR, and we expect online to continue to grow also in the years ahead. So all in all, that summarizes the strategy and plan looking ahead. So with that, we'll move into Q&A.

If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Nicholas Ecman from DNB Carnegie. Please go ahead.

Thank you very much and congratulations on very strong results. Can I ask you a little bit about current trading here with the continued good 8% growth that's on two years of tough comparisons, and we just got apparel data from Sweden this morning that was down more than 8%, so it seems to be a very challenging macro environment. Can you tell us a little bit more about the main drivers here? Which categories are performing the best? Do you have any underperformers? What do you see in terms of consumer behavior and maybe gaining at the expense of competition, or any more flavor on the reason for this strong performance?

Yeah, good morning Nicholas. So, looking at the May numbers, I think one overall conclusion is that it's been a very weak start to the season both when it comes to spring and summer. And if I look at May this year versus last year, obviously it was a heat wave last year and we sold a lot of fans, air conditioners, etc., and seen much less traction on those categories in May. And this is obviously where the all-weather portfolio comes in. So we have been able to drive growth on our fixed category including garden machinery, robotic lawnmowers, grass trimmers, those type of categories. But we've also seen continued good development on our tech and tech accessories where we have seen nice growth over the last few years. So I think you refer to macro, yes macro has been challenging but also the season start has been challenging, and again I think this proves the point of having more areas to focus on when the season is not going our way.

Very good. And just to clarify, I notice you have some new reporting here also in terms of sales on the monthly sales. You talk about other markets which is B2B for spares. Is that still the Nordics and that figure was down almost 50%? Can you elaborate on that? And I guess adjusting for that, that means that your sales were up around 10% if you adjust for the B2B fluctuations. Is that correct or am I missing something?

No, that's correct. So, first of all, when it comes to the May sales report, obviously we are always reporting in a one-segment structure. So as of the new fiscal year, the spares numbers are now included in the overall number. So we are not anymore separately reporting spares, which then means it's country-based. So other markets basically include markets outside Sweden, Norway, Finland. So here you have a combination of business-to-consumer in Denmark for example where we have launched battery expansion and technique, but the majority of the other markets is business-to-business and it is actually a pan-European business. And also as we outline a little bit in the report, the business-to-business effect on spares in the month of May is very much driven by the fact that the US dollar has weakened versus the euro. So if we look at our pan-European B2B customers, they have been able to buy spare parts from other parts of the world outside of Europe with their strong currency. So that's the reason for the decline in the other markets segment. And your conclusion that the majority is business-to-business spares is correct, and it's also correct that if you exclude that, we saw even higher organic growth on the other part of the business.

Very clear. And speaking of currency here, you mentioned the US dollar weakness and I guess you've seen some of that already here in Q4 but only a very limited effect, but that should be a potentially significant contributor in coming quarters, or is there other factors here that go the other way?

And so on the US dollar, we need to remember it's gone fast when it comes to the dollar development. Only back in January it was above 11 kronor and now it's below 10, and obviously that will help us moving forward. And as a rule of thumb, you can think about maybe six to eight months from a placed order before the results start happening. So we will see some positive dollar effect in the quarters to come. And then on the other hand, the Norwegian krone is obviously impacting us immediately. It's been at record low levels now over the last few months. So the Norwegian krone is impacting us immediately given the high sales in Norway, and then the US dollar effect will help us forward.

Clear? Just a final question, because with that in mind and you now have a margin of more than 10% for the full year and you have currency tailwinds in the coming quarters and a quite strong momentum, but you're still sticking to a 7 to 9% target. Is there anything you see in the short term that argues why the margin should go back to that target range?

No, there's nothing in the immediate that structurally should take down the margin. Obviously there is volatility when it comes to the currencies, etc., but there's no activities on our end in terms of pricing or anything else that will impact the margin negatively. And then of course it depends on the macro factors, but there's nothing we're expecting in the short term to impact that.

Very clear. Thank you for taking my questions. Thank you.

There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Yes, and we do have a couple of questions from the webcast. We have Philip Y from Pareto looking at asking about the organic growth in Norway and if we could provide some more detail on product categories and other factors driving this performance. Yeah, good morning Philip. So, the development in Norway has been very strong and, as you also include in your question, it is broad-based, so we're growing across the niches. And looking at the month of May, obviously the organic growth was strong, but the trend in terms of season start has been very similar across the three countries. So what I referred to earlier in terms of high selling categories, it's not been the typical seasonal ones in terms of fans etc., but other products with garden machinery, etc. And that also holds true for Norway.

And Philip has a second question also about the club class and the membership growth there. Could you add some more details on which customer segments and regions that are driving the growth? Yeah, so overall club class in terms of membership is up across the three countries. So it's coming from all countries and the growth has been half a million new members in the last year. And as stated before, we also see a good inflow of customers in the younger customer groups. We do have a very high mental awareness, mental penetration with younger customer groups. But the half a million new customers is also broad-based. It comes across countries, across age groups, but with the younger customers representing the biggest growth.

And finally from Philip, a question about sourcing cost, if we could quantify this or provide additional color to the sourcing cost and what we can expect going forward. Yeah, so when it comes to sourcing cost, obviously a part of that also relates to a few different things driving that. So obviously transportation cost but also the US dollar. So as talked about before, we expect the US dollar impact on the sourcing side to help us starting as of more or less six months after placed order. So looking at when the dollar came down versus the Swedish krona, and then looking ahead, that will help us. And then of course as always, we work on sourcing cost across the sourcing network from all the different countries to also have very competitive pricing.

And that was from Philip. And One Invest is asking about the capex and the forecasted investments, the expansion. Yeah, so on the capex, as you stated in your question, we're increasing the outlook to 250 million for the year and the main driver of that relates back to the store network where we're planning to both open new stores but also to do more refurbishments of stores. We are reopening a lot of stores right now and we see a strong effect when we are investing in making the store more efficient, more customer-friendly, more converting. So that's the biggest driver. Then we're also making some investments in our distribution center with a little update to some automation and other things. And last but not least, we're investing a little bit also in the IT infrastructure. So those are the key drivers of the capex increase.

We also have a question from Samuel, could you please elaborate a bit on the pricing strategy for instance? Yeah, so on the pricing strategy, obviously we are working very dynamically with pricing and we are working with a structured key value category, key value item framework to ensure that we're always competitive when it comes to price points on the most important part of the assortment. So we are making adjustments on a daily, weekly basis actually and always ensuring that we are competitive. We never want to lose a customer based on the price.

And then there's a more detailed question about like-for-like sales breakdown, etc. I think we could take that outside of the call. I'd be happy to answer those kind of questions later on given it's a longer time period. And we have one more question from One Invest as well. Refurbished store sales versus prior to refurbishments. What do we see? Yeah, we have not communicated any details about that because it also depends a lot on what type of store refurbishment we're talking about and so it varies, but of course the ambition for us is always when we invest, we want to see a strong return on that investment. So we always want our invested capital to be above our weighted average cost of capital. So that's kind of the trigger when we want to do investments, that we want that to give a return. And then exact sales development etc. varies and we haven't communicated any broader conclusions on that.

See if we have time for one more from and we also have someone in line from the telephone conference. I can tell, but maybe just a bit more color on also question from Samuel about cost for new stores. Yeah, so that also varies a bit but we usually say that we want to be below 4 million in investing in a new store, but it varies a little bit on the circumstances. Our store network is different from a lot of other retailers given that we are very focused on city centers and shopping malls. So that might include different levels of construction, but on average below four.

Great. Then I'll hand back to the telephone conference where I think we have an additional question.

The next question comes from Andreas Lundberg from SEB. Please go ahead.

Yeah, good morning. Thank you. Andreas with, can you hear me?

Yes. Yeah, absolutely. Absolutely.

Great. Uh coming back to the question on sourcing costs. It talks about lower sourcing cost and you're moving around a little bit to find competitive prices. Is that the key reason for lower sourcing costs or is there anything else behind that?

I think the key... I mean, there are a couple of reasons obviously. One is that we are actively working with a much broader sourcing network today. Then of course our volume increase and scale is also helping. We are becoming bigger. And then the last point of course with the currency effects is also.

Okay, cool. And on the same, more similar topic, you talk about price and product mix. Can you be a little bit more concrete there? What is behind that positive effect on the margin?

Yes, on the price and product mix. Obviously we have launched a lot of new products, and also looking at what we talked about last call, we have launched a lot of new products within power tools, garden machinery, etc. And similarly across other categories, we are also carrying items at higher price points and we have seen a bit of trade up in some categories. When it comes to price mix, it's been also how the assortment has evolved with products on higher price points.

Okay, got it. And pricing in general in the market, how would you say about that now versus a year ago?

So, all in all, it varies a little bit per market. But of course, we're not in the same inflationary environment that we used to be a few years ago. So I would say it's fairly normal. Then obviously we have seen some tendencies now early in the season that some retailers have started to price promote some of the seasonal products, etc. But not that big still yet. So all in all, nothing disruptive when it comes to price. But I think as we have talked about before as well, the categories and markets that we are focusing on, the inflation has also been lower than in other categories over the last few years, but nothing major happening right now from the pricing point of view.

And now when you have upped your game in the last two three years, how would you say competition has acted during this time and to better compete with you?

Do you mean from a pricing point of view or?

Yeah, in general. You see any changing behavior from competition? That is the main question.

I mean, it's hard to conclude on one overall I would say, given that we do have different type of competition in each of the five product niches that we're operating in. So obviously the behavior has been slightly different if you're looking at online players versus retailers, etc. But of course, on the assortment side, that's always an area where we see others launching similar products, etc. But I think that's one of the uniquenesses as well with our five niches, that the combination of the five, I don't really see too many others working with that. So sorry for a bit fluffy answer, but I don't think there is any one key takeaway with the amount of competitors that we are looking at.

That's fine. Lastly, it seemed that you had some payment issues the other day. Is that solved and what was it about?

Yeah, you're correct, we had that. Happy days, the other week, that's all been solved. And we do not expect that to happen again. It was an internal issue that disrupted us for a few hours.

Got it. Thank you so much.

Thank you.

It appears that we don't have any more questions from the telephone conference. We do have a new question from Philip Pareto. Uh, if we could share any info on OPEX stemming from Norway in specific.

So we're not reporting, obviously with the one segment reporting we only share the full P&L across countries. So we haven't reported specifically the OPEX share in Norway.

Yes. Great. And I think by that we have no more questions from the webcast either. So just final remarks from me. Thank you very much for taking the time. Great questions and we will see all of you when we report our first quarter in early September. So thank you very much.