Lindex Group Q2’25 earnings preview: Earnings are expected to be on par with the comparison period

Translation: Original published in Finnish on 07/15/2025 at 08:23 am EEST

Lindex Group will report its Q2 results on Friday, July 18 at around 8:30 am EEST. We expect the Group's revenue to have grown slightly year-on-year and adjusted EBIT to be in line with the comparison period. Lindex has guided for full-year revenue growth of 0-4% in local currencies and adjusted EBIT of 70-90 MEUR. The company may lower its guidance, especially regarding revenue development, and our forecasts for both revenue and EBIT are closer to the lower end of the ranges.

Source: Inderes

Shut-down of the Itis department store and currencies support revenue

We expect the company’s revenue to grow by 3% from the comparison period. For the Lindex division, we expect 3% growth, which will largely come from the strengthening of currencies, with organic revenue growth being only slightly positive. With a strong June, market development in the most important market, Sweden, has been slightly positive, which supports our forecast. We believe that the Stockmann division's revenue grew by 3% due to the clearance sale at the Itis department store. On the other hand, Finland’s market development has been weak, at least in April-May. The revenue growth we expect is, therefore, inherently low-quality. 

Earnings estimate at the level of the comparison period

We expect the Lindex division's adjusted EBIT to decrease slightly to 29 MEUR from 31 MEUR in the comparison period. This is mainly due to the normalization of the exceptionally strong gross margin (67.5%) in the comparison period. The Lindex division suffered from logistics problems/the relocation of the logistics center both in Q3'24 and Q1'25. It is possible that Q2 will still see negative effects from this, before the new logistics center is fully operational later in the year. In the Stockmann division, we expect earnings to improve from -1 MEUR to 1 MEUR. The clearance sale in Itis will likely weigh on the gross margin, but we believe that cost efficiencies and increased revenue will offset the negative impact of the weaker gross margin. The Group's earnings forecast is set at 29 MEUR, i.e. very close to the level of the comparison period. 

Our estimate is towards the bottom of the guidance range

Lindex's guidance for 2025 is for revenue to change by 0-4% in local currencies and for adjusted EBIT to be in the range of 70-90 MEUR. Our estimate is close to the bottom of the guidance, as we only expect slight growth and an adjusted EBIT of 74 MEUR. Thus, for example, a slight decrease in the revenue forecast and lowering the upper end of the earnings forecast range are, in our view, possible, but already in line with our expectations. 

The restructuring will end in the fall, and the strategic review by the end of the year 

In June, the company announced that the final restructuring dispute had been settled and approved in the district court. With this, the completion of the restructuring is only subject to official approval by the court, which the company expects to receive during Q3. The company also announced that the strategic review of the department store business, i.e. the Stockmann division, which has been ongoing for almost two years, will continue, and the results will be announced by the end of the year. We still believe the company is aiming to exit the department store business. The results of the strategic review will likely be announced after the restructuring has officially ended. We commented on the end of the restructuring and the strategic review in more detail in  our latest report.