Lindex continues to outperform Stockmann in latest quarter

The owner of the Lindex womenswear brand — Finland-based department store operator Stockman — has released its Q3 figures and said Lindex is continuing its “strong performance”.

The company — which is mulling a name change to reflect the label’s growing importance to the business — actually said group revenue fell 7% to €226.9 million in the three months to the end of September with a fall of 1.7% in local currencies.

But the Lindex division managed to grow its revenue in local currencies with a 4.9% increase, even though reported revenue fell to €162.3 million from €166.9 million.

Meanwhile, the Stockmann division turned in a worse performance, mainly due to the timing of its Crazy Days promotional campaign, which was held in October this year rather than starting in September as it did a year ago. This meant that revenue fell to €64.7 million from €77.1 million. 

While the group’s overall gross margin improved to 58.5% from 56.8%, its adjusted operating profit fell to €20.6 million from €22 million a year earlier, although it improved slightly in local currencies. 

At Lindex, adjusted operating profit rose to €26.2 million from €22.5 million with a “significant” improvement in local currencies. But at Stockmann, the adjusted operating result was a loss of €4.8 million, down from a profit of €0.2 million, again linked to that promotional campaign timing. 

For the year as a whole, Stockmann expects the group’s revenue to be in the range of €940 million-€1 billion and adjusted operating profit to be €65 million-€85 million, subject to foreign exchange rate fluctuations. 

That guidance is based on the assumption that continuing high inflation will increase costs compared to 2022 and have an adverse impact on consumer demand. 

CEO Susanne Ehnbåge said: “Priorities are to improve profitability to create a solid and sustainable foundation for the future as well as to accelerate the growth of Lindex.

“The group’s underlying business is developing in the right direction. The financial situation has improved during the latest months, both regarding financing and equity, and we will continue the work to create long-lasting shareholder value and better profitability for both divisions. 

“Lindex has improved its profitability significantly in the past years and will continue to grow by entering new markets and sales channels, whereas the Stockmann division will continue its repositioning towards luxury and affordable luxury. 

“Both divisions are making considerable investments in improving their overall digitalisation to meet customer expectations and improve process and cost efficiency.”