RugVista Group (RUG) Q2 2024 earnings summary

Executive summary

• Order volume and new customer growth were strong in Q2 2024, with order count up 13.4% and new customers up 12.2%, despite weak consumer sentiment and inflation, especially in Europe.

• Net revenue for Q2 2024 was SEK 128.4 million, down 0.5% year-over-year, mainly due to a 15% decline in average order value as consumers shifted to lower-priced items.

• High customer satisfaction was maintained, with NPS at 62 (down from 65), and Trustpilot score at 4.7, though NPS saw a slight decline due to carrier service issues.

• Strategic initiatives, including assortment expansion, digital platform improvements, and new e-commerce launches, contributed to double-digit growth in order count and new customers.

• Outdoor rug sales grew over 50% year-over-year, becoming a significant Q2 subcategory.

Financial highlights

• Net revenue: SEK 128.4 million (-0.5% YoY); organic net revenue growth -1.0%.

• Gross margin: 63.0% (down 0.6pp YoY, up 1.4pp QoQ); EBIT: SEK 2.4 million (down from SEK 11.8 million); EBIT margin 1.8% (down from 9.1%).

• Cash and cash equivalents at quarter-end were SEK 154.5 million, up year-over-year, with no interest-bearing debt.

• Dividend of SEK 1.8 per share (SEK 37.4 million) paid during the quarter.

• Inventory at 21% of LTM net revenue, within target range, built up for peak season.

Outlook and guidance

• Outlook remains uncertain, especially in Central and Southern Europe, with continued weak purchasing power and high price sensitivity.

• Focus remains on adapting to consumer behavior, maintaining profitability, and leveraging improved assortment and digital capabilities.

• Preparations for the peak season are underway, with readiness to capture demand as household purchasing power improves.