In This Article:
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Net Revenue Growth (Q4 2024): 5.5% increase to SEK318.4 million.
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Net Revenue Growth (Full Year 2024): 3.2% increase.
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Operating Margin (Q4 2024): 11.4%.
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Operating Margin (Full Year 2024): 8.5%.
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Gross Margin (Q4 2024): 53.3%, up from 50.0% in Q4 2023.
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Gross Margin (Full Year 2024): 53.1%, up from 47.9% in 2023.
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Own Brand Share (Q4 2024): 47.2%, up from 36.3% in Q4 2023.
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Return Rate (Q4 2024): 27.9%, down from 33.0% in Q4 2023.
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Warehousing and Distribution Costs (Q4 2024): 12.7% of net revenue, down from 15.1% in Q4 2023.
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Marketing Costs (Q4 2024): 9.7% of net revenue, up from 8.6% in Q4 2023.
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Cash Position (End of Q4 2024): SEK196.9 million.
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Operating Profit (Q4 2024): SEK36.2 million, up from SEK24 million in Q4 2023.
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Cash Flow from Operations (Q4 2024): SEK71.8 million, up from SEK50.4 million in Q4 2023.
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Equity Ratio (End of Q4 2024): 27.3%, up from 22.3% in Q4 2023.
Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Nelly Group AB (FRA:CD20) reported net revenue growth of 5.5% in Q4 2024 and 3.2% for the full year, marking three consecutive quarters of revenue growth.
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The company achieved an operating margin of 11.4% in Q4 2024 and 8.5% for the full year, with seven consecutive profitable quarters.
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Gross margin improved to 53.3% in Q4 2024 from 50.0% in the same quarter last year, driven by increased own brand share and reduced discounting.
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Return rates improved significantly, with a Q4 2024 rate of 27.9% compared to 33.0% in Q4 2023, enhancing customer experience and reducing costs.
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Warehousing and distribution costs as a proportion of net revenue decreased to 12.7% in Q4 2024 from 15.1% in Q4 2023, due to operational efficiencies and lower return volumes.
Negative Points
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Average order value decreased by 5.8% in Q4 2024, driven by lower average item value and fewer items per order.
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Marketing costs increased to 9.7% of net revenue in Q4 2024 from 8.6% in Q4 2023, reflecting higher spending on performance marketing.
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Administration and other operating expenses rose to 19.4% of net revenue in Q4 2024 from 18.3% in Q4 2023, mainly due to IT-related costs.
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Currency effects had a slightly negative impact on net revenue growth in Q4 2024.
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The company faces ongoing challenges in maintaining relevance and attractiveness in a competitive and volatile fashion retail market.
Q & A Highlights
Q: Do you perceive that the consumer has become stronger, or should we expect further internal improvements for continued growth going forward? Can higher marketing costs as a percentage of sales be expected going forward as a result of better traction through your new IT systems? A: Yes, the consumer has become stronger, with a more considered approach to purchasing. We expect both stronger markets and internal improvements, including IT enhancements. Investing in profitable marketing remains central, ensuring every marketing expense is well spent.