Puuilo Q4'25 flash comment: Result and guidance in line with expectations, investors rewarded with special dividend

Translation: Original published in Finnish on 3/25/2026 at 9:24 am EET.

Source: Inderes & Bloomberg (consensus, 4 estimates)

Puuilo's Q4 result was strong, as expected. The solid earnings development was fueled by revenue growth across the group and an improved relative gross margin. In addition to the regular dividend, the board of Puuilo is proposing a special dividend, together representing a return of approximately 6%, based on yesterday's share price. The guidance was also fully in line with expectations. Preparations for internationalization are currently underway, and the first store in Sweden is likely to open in 2027. While the report met expectations and is not likely to lead to significant changes in forecasts at this point, we believe that, following the recent decline in the share price, the price will likely react positively or stronger than the market.

Strong growth in line with expectations

Puuilo's Q4 revenue grew by 15% to 101 MEUR. The result was aligned with our expectations (Inderes and consensus 99 MEUR). Revenue growth was driven by new stores (+7 y/y) as well as by like-for-like growth (6%) picking up from the last quarter. We consider it important to see a pickup in comparable growth that supports scalability, as it has stagnated below historical levels for some time. The number of customers also increased both for the entire network (16%) and comparable stores (6%), indicating the appeal of the Puuilo concept. For new stores, the average basket size decreased, but the company managed to slightly bump up the customers' average basket size in comparable stores. This was also reflected in the growth of online sales (7%), which, however, still accounts for only a small share (~2%) of the group's total sales. We estimate that the company has continued to gain market share, largely due to a combination of an attractive concept and a low price level.

Another excellent result, special dividend expected

Puuilo’s Q4 EBITA improved from the comparison period to 17 MEUR (16.3% of revenue). Growth was quicker than expected (Inderes 15.6 and consensus EBITA* ~15.8 MEUR). The improvement in earnings was driven by both volume growth and a positive development in product margins. In our view, the approximately 0.3 percentage point increase in gross margin (38.8%) was driven by robust growth in private-label products, whereas changes in the sales mix, in our estimation, no longer had the same impact as in previous quarters. Earnings growth in turn was limited by fixed expenses which grew faster than revenue due largely to new store openings and wage inflation. With a stronger-than-estimated operational result, as well as more moderate-than-expected financing costs and taxes, EPS of EUR 0.14 also exceeded both our and consensus expectations (EUR 0.13).

The board's proposed basic dividend of EUR 0.54 per share fell between our (EUR 0.52) and the consensus (EUR 0.55) expectations. Additionally, the board is proposing a special dividend of EUR 0.12. Together, these dividends represent a 100% payout ratio and a dividend yield of around 6%, based on yesterday's share price. Given Puuilo's abundant cash flow profile, we believe that deleveraging the balance sheet is warranted, and the store opening model itself does not tie up significant capital.

Guidance in line with expectations, first store in Sweden unlikely to open until 2027

The guidance provided for 2026 points to growth in both revenue and earnings. The new guidance indicates that revenue will be between 480 and 510 MEUR (2025: 442 MEUR), with adj. EBITA between 80 and 90 MEUR (2025: 77 MEUR). Overall, the guidance meets our expectations and the consensus almost perfectly, with the midpoints of the ranges at the level of the forecasts. Measured at the midpoints, the company expects revenue growth of around 12% (2025: 15.4 %) and an EBITA margin of 17.2% (2025: 17.4%). Geopolitical tensions that have risen in recent weeks introduce some additional uncertainty to the 2026 outlook, but we believe the company has already attempted to account for these in its guidance. We believe this is particularly emphasized in the revenue growth guidance because the company announced that it would open up to 8 stores this fiscal year, whereas we had expected 7.

Preparations for internationalization, which is key to long-term growth, continued in Q4 as the company successfully hired a country manager for Sweden. At the same time, Puuilo initiated negotiations for the location of its first store, which the company expects to open within the next 18 months, i.e., by Q3'27 at the latest. As a result of these preparations, the company expects to incur additional costs of approximately 1 MEUR during 2026, which are included in the issued guidance.