New Wave Group (NEWA) Q2 2025 earnings summary

Executive summary

• Q2 organic growth was 1.3% in local currencies, below the 3-4% target, due to tough market conditions, negative currency effects, and calendar impacts from Easter.

• Net sales in SEK decreased by 4.1% in Q2 to SEK 2,300 million, mainly due to currency effects, while market share increased.

• Strategic acquisition of Cotton Classics strengthens market leadership in Central Europe, Switzerland, and Austria, with consolidation pending regulatory approval.

• Continued investments in warehouse automation, IT, and marketing, impacting short-term earnings but supporting long-term growth.

• Operating profit and net income declined year-over-year, reflecting challenging macroeconomic and currency conditions.

Financial highlights

• Q2 net sales: SEK 2,300 million (down 4.1% year-over-year); half-year: SEK 4,484 million (up 2.1%).

• Q2 operating profit: SEK 241 million (down from SEK 301 million); operating margin: 10.5% (down from 12.6%).

• Q2 net income: SEK 167 million (down from SEK 210 million); EPS: SEK 1.26 (down from SEK 1.59).

• Gross profit margin for the half-year: 48.9% (down from 49.3%).

• Cash flow from operations (H1): SEK 368 million (down from SEK 541 million); cash flow remains stable despite inventory build-up.

Outlook and guidance

• Management expects at least one or two more tough quarters before improvement, but anticipates gradual recovery as client inventory levels normalize.

• Focus remains on gaining market share, brand development, further acquisitions, and infrastructure investments.

• Signs of a potential market turnaround are noted, but timing remains uncertain due to global and tariff-related uncertainties.