Translation: Original published in Finnish on 9/5/2025 at 7:44 am EEST.

Source: Inderes & Bloomberg (consensus, 5 analysts)

Puuilo publishes its Q2’25 result (May-July) on Thursday at around 8:30 am EEST. We expect revenue to have continued its brisk growth, driven by both new and existing stores. We also expect earnings to have improved slightly faster than sales. Additionally, the company plans to update its financial targets, extending them to 2030 (was 2028). This will be interesting because, given Puuilo's reliable performance, it is safe to look further ahead on the horizon. Puuilo's Q2 results broadcast in Finnish can be watched on inderesTV at 12:00 am EEST.

New stores bring growth, but existing stores also grow over time

We expect Puuilo's Q2 revenue to increase by 15% to 138 MEUR. In our view, this growth is driven by a network that has expanded to 54 stores, an increase of 8 stores from the comparison period. We also expect comparable revenue to have been brisk. Growth is driven again by an increase in customer numbers. If our growth predictions materialize, it will be an excellent performance, and the company will have succeeded in capturing sales from its competitors once again.

We expect strong results for the quarter and the full year

We forecast that Puuilo's adjusted EBITA will increase to 29.6 MEUR (Q2'24: 24.8 MEUR) and relative profitability will simultaneously improve by 0.7%, primarily due to strengthening gross margins. This is explained by the favorable development and increased share of products with good profitability, i.e., those with a low price point, as well as the growth in the share of private labels. While the company's fixed cost structure also scales with strong growth, this growth is limited by the rapid pace of new store openings. Puuilo's guidance for fiscal year 2025, issued at the end of March, anticipates revenue to be 425-455 MEUR and adjusted EBITA 70-80 MEUR. The midpoint of the guidance implies 15% growth and profitability of 17%. After a strong first half of the year, we predict that the earnings guidance range will be narrowed towards the upper end.

Targets for 2030 will be set

In connection with the review, Puuilo intends to announce its goals for the 2026–2030 strategy period. The current targets are anchored to the 2028 financial year, with key targets including revenue exceeding 600 MEUR and an EBITA margin surpassing 17%. We consider the current targets to be realistic, as we forecast revenue of 610 MEUR and an EBITA margin of slightly over 18% for 2028. For 2030, we forecast revenue of approximately 720 MEUR and EBITA of 130 MEUR. During earnings day, it will be interesting to hear whether the company agrees with our projections and why. Puuilo has achieved its goals thus far, which lends further credibility to the management's statements. Based on our 2030 forecasts, Puuilo's valuation would be around P/E 11x, which is cheap for a defensive, quality company. We have not previously been prepared to consider valuation this far ahead because it is particularly challenging to forecast the range of the dynamic competitive environment in the discount store sector 5 years in advance.