NELLY GROUP AB Q3 2023 – the quarter in brief
• Net revenue was
• Gross profit was
• Operating profit was
• Profit after tax was
• Cash flow from operating activities was
• Cash and cash equivalents amounted to
Q3 2023 – Significant events during the quarter
•
• On
January–September 2023 – the period in brief
• Net revenue was
• Gross profit was
• Operating loss was
• Profit/loss after tax was
• Cash flow from operating activities was
Significant events after end of quarter
• No significant events have been reported since the end of the period
A profitable quarter, driven by a stronger customer offer and continued cost control
In Q3, we continued to see pleasing signs that our transformation work is generating results. Our gross margin improved compared to last year, landing on 50.7% (41.5%), and we achieved an operating margin of 5.4% (-4.2%). Profit after tax came in at
During the quarter, we delivered clear improvements across multiple areas, which were driven primarily by a more attractive assortment. Our autum/winter collection had a strong start, our bestselling products sold in higher quantities compared to last year, and we increased the share of full-price sales. Nelly’s own brands accounted for 39.4% (34.2%) of total sales and
our return rate improved, landing on 34.3% (36.2%). The return rate improvement was partly due to a more favourable balance between party and everyday fashion in the product mix, but we also achieved improvements within several categories. Taken together, this shows that our customers are prepared to prioritise attractive and relevant products at the right price points even in this prudent economic climate.
The positive trend we have seen in the development of our operating costs this year continued in the third quarter. Warehousing and logistics costs fell further, and we also reduced our marketing costs, both by continuing to focus on organic traffic and through better investments in generating paid traffic. Salary costs were also lower than last year given that the business is now run by a significantly smaller organisation.
Our transformation work needs to continue unabated
We have achieved clear improvements across several areas since our transformation journey began last year, and these have now resulted in two profitable quarters so far in 2023. This does not mean however that our transformation work is finished or that the rate of change can slow down. In addition to lower net revenue in Q3, we also saw a continued decline in traffic to our site and a lower conversion rate compared to the same quarter last year. We therefore need to continue to further strengthen our customer offer by creating an even more attractive and easy-to-navigate assortment at competitive price points.
In Q3, we also intensified our work to overhaul our systems landscape and continued to prioritise those areas that enable a better customer experience and simplify internal processes. This work will continue in the coming quarters and can now be further accelerated with a new permanent Chief Technology Officer in place as part of Nelly’s management team.
A positive platform to continue to build on
We have now entered the last quarter of the year, which is an exciting time for our business. We look forward to Black Week and Christmas trading, during which we will also be able to interact with our customers in a physical setting for the first time through our newly opened flagship store on Drottninggatan in
and a genuinely healthy business.
Helena Karlinder-Östlundh,
CEO of
Borås,
Conference call/webcast of the third quarter 2023 interim report
Analysts, investors and media are invited to a conference call at
Note: It is only possible to ask questions in writing (not by phone). To submit questions you want answered after the presentation, please use the link below. It is possible to submit written questions both before and during the broadcast.
Link to webcast: https://nelly.videosync.fi/2023-10-27-q3
To listen to the report by phone, the following callin details are available:
Finland : +358 9 4245 0972
Sweden : +46 8 525 07003
United Kingdom : +44 20 7043 5048
United States : +1 (774) 450-9900
Conference ID (PIN): 100382#
User ID: 08155#
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