Clas Ohlson (CLAS) Q4 23/24 earnings summary

Executive summary

• Q4 organic sales grew 13% year-over-year, with total Q4 sales reaching 2,167 MSEK and operating profit improving to 65 MSEK from -7 MSEK last year.

• Full-year revenue surpassed 10,232 MSEK for the first time, with 11% organic growth and operating profit margin at 7%.

• EPS for the year reached 8.03 SEK, up from 2.85 SEK, supporting a proposed dividend of 4.25 SEK per share, up 2.75 SEK from last year.

• The company completed the acquisition of Spares Group, expanded its store network by 8 net stores, and launched a record number of new products targeting younger demographics.

• Online sales, including Spares Group, now represent 18-19% of total sales and remain a key growth driver.

Financial highlights

• Q4 sales excluding Spares Group rose 12% to 1,998 MSEK; including Spares, sales reached 2,167 MSEK, up 22% year-over-year.

• Full-year sales excluding Spares Group increased 10% to 9,885 MSEK; including Spares, sales totaled 10,232 MSEK, up 13%.

• Gross margin improved to 39.4% in Q4 2023/24 from 38.8% in Q4 2022/23, aided by lower sourcing and transport costs.

• Operating profit for the year (excluding items affecting comparability) rose to 921 MSEK from 459 MSEK; full-year profit after tax reached 509 MSEK.

• Cash flow from operating activities was 1,489 MSEK, a record high.

Outlook and guidance

• Financial targets remain: 5% organic growth and 7%-9% EBIT margin annually.

• May 2024 organic sales up 13%, with strong performance across Sweden, Norway, and Finland.

• Plan to open a net of approximately 10 new stores in 2024/25; investment level to normalize at around 200 MSEK, with 30-50 MSEK for IT.

• Proposed dividend of 4.25 SEK per share, representing 55% of profit after tax.

• No further M&A assumed in targets, but open to opportunities if they arise.