• Revenue: NOK 886.9 million, an all-time high for the company.

• Gross Margin: 62.1%, flat compared to last year.

• EBITDA: NOK 236.4 million, a decrease of NOK 5 million from last year.

• Earnings Per Share (EPS): 1.73, down from 2.23 last year.

• Cash Flow from Operations: NOK 110.4 million, impacted by Q4 preparations.

• Revenue Growth: 6.7% increase on a constant currency basis; total growth of 4.4%.

• Like-for-Like Growth: 3% driven by both physical stores and online.

• Online Revenue Share: 11.4%, slightly down from last year.

• Operating Expenses: Increased by NOK 40 million, a 14.6% rise from last year.

• Dividend Payment: NOK 3 per share.

• Net Interest Bearing Debt: NOK 784.3 million, with a financial gearing ratio of 1.3.

• Store Portfolio: Opened seven new stores by the end of the year.

• Warning! GuruFocus has detected 5 Warning Sign with LTS:0RCW.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Kid ASA (LTS:0RCW) achieved an all-time high revenue of NOK 886.9 million in Q3, with notable growth in Kid Interiors.

• The company maintained a strong gross margin of 62.1%, one of the highest for the third quarter historically.

• New product categories introduced since 2022 contributed significantly to sales, enhancing the existing assortment and driving customer traffic.

• Kid ASA is investing in future growth with new store openings and expansions, including a significant new store in Oslo.

• The company reported a 6.7% revenue growth on a constant currency basis, driven by increased basket size and customer numbers in physical stores.

Negative Points

• EBITDA decreased by NOK 5 million to NOK 236.4 million, indicating some pressure on profitability.

• Hemtex experienced a revenue decline, aligning with expectations due to the previous year's extraordinary 50th-anniversary campaign.

• Operating expenses increased by 14.6% compared to last year, driven by higher employee benefit expenses and increased marketing costs.

• The online revenue share decreased slightly to 11.4%, indicating a potential challenge in maintaining digital sales growth.

• Inventory levels increased by 27% year-over-year, partly due to early delivery of goods and new category introductions, which could impact cash flow.

Q & A Highlights

Q: Your costs look high in the quarter. How should we think about the cost development going into Q4? A: We have explained the cost development with significant currency effects, bonus provisions, and logistic increases. We do not guide on future costs but refer to our financial objectives with OpEx to sales ratio at current levels on an annual basis. Some costs are investments in future growth, and the bonus provision is a timing issue compared to last year.