In This Article:
Release Date: February 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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XXL ASA (STU:2XX0) reported positive sales development in Q4 2024, marking a sales recovery throughout the year.
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The company experienced growth in key periods such as Black Week and Christmas, with strong execution both in stores and online.
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E-commerce returned to growth, and the company gained market share in Sweden, outperforming the market by more than 3%.
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The loyalty program, XXL rewards, saw significant growth, increasing from 3.4 million to over 4.3 million members.
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The company achieved a 4.5% growth in January 2025, driven by a stronger commercial plan and increased conversion rates across all markets.
Negative Points
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Operating revenue for Q4 2024 decreased by 1.8% compared to the same quarter last year, with a 10% decrease for the full year.
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Finland remains a challenging market for XXL ASA (STU:2XX0), with reduced EBITDA in this region.
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The company faced availability challenges due to record low inventory levels, impacting sales volumes.
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There were significant non-recurring costs in Q4 2024, including expenses related to equity financing and a VAT dispute in Norway.
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The liquidity reserves decreased by more than 400 million compared to the previous year, driven by a reduction in revolving credit facilities.
Q & A Highlights
Q: Can you elaborate on the key drivers behind the sales growth in Q4 2024? A: (Freddy Sin, CEO) The sales growth in Q4 was driven by several factors, including a strong performance during Black Week and Christmas, a rebound in e-commerce, and market share gains in Sweden. Additionally, our private label products saw significant growth, and our loyalty program, XXL Rewards, expanded its membership base significantly.
Q: How did the financial performance in Q4 compare to the previous year, and what were the main challenges? A: (Lars Christian, CFO) Operating revenue for Q4 was slightly down by 1.8% compared to the previous year, but we saw improvements in gross profit margins. The main challenges included availability issues and a VAT dispute in Norway, which led to non-recurring costs. However, we managed to offset some of these challenges with cost reductions and improved margins.
Q: What steps is XXL taking to address inventory challenges and improve availability? A: (Freddy Sin, CEO) We are focusing on our category reset strategy to enhance our product assortment and availability. Although inventory levels remain low, we have increased the volume of products by 14% within the same inventory value. This has helped improve conversion rates and store operations across all markets.