Translation: Original published in Finnish on 7/1/2025 at 7:55 am EEST.

The target market of Kesko’s grocery trade, Tokmanni and Lindex’s Stockmann division, i.e., the department store and hypermarket chains, increased by approximately 1% in May. However, sales increased only in food (5%). Sales of non-food items fell by 5%, with long-suffering apparel sales declining by as much as 15%. Sales in the home and leisure product group decreased by 2%. We believe that the apparel figures are impacted by a combination of a high comparison figure and a cool spring.

Kesko's development below the market

Kesko's consumer goods sales to consumer customers declined by 4% in May. Meanwhile, total Finnish grocery sales in May grew by just under 1%. Thus, Kesko's consumer goods sales to consumers developed below the market trend, whereas in April, they had developed in line with the market. This suggests that Kesko's negative trend in market share has continued. In B2B consumer goods sales, Kesko (i.e. Kespro) developed in line with the market as sales and the market both fell by 8%. The decrease was partly due to delivery days, and after adjusting for them, Kesko's sales decreased by 3%.

Market development was negative for Tokmanni

Market development in May was negative for Tokmanni's Finnish operations, with non-food sales decreasing. We believe this is largely due to the strong comparison figures resulting from last year's warm spring, while this year has experienced cool spring and early summer weather. We expect Tokmanni segment sales to grow by 4% year-on-year in Q2, supported by the increased store network. After a weak May, the April–May trend is close to zero. The comparison figures for June are easier but, on the other hand, continued cool summer weather is likely to negatively impact the June figures as well.

Apparel, a key business for Lindex, fell sharply

In May, the apparel market, which is important for the Lindex Group, declined by as much as 15%, which in our view was weakened by strong comparison figures and cool weather. The apparel market has fallen by 9% in April and May, so despite a possible recovery in June, the overall evolution is likely negative for Q2 as well. For Stockmann department stores, we expect Q2 revenue to grow by 3%, but this is supported by clearance sales due to the closure of the Itis department store. We previously expected comparable market and department store performance to continue slightly negative in Q2. In light of the latest figures, there is slight downward pressure on our estimates. Our projections are already close to the lower end of the company's guidance range, particularly regarding revenue. A slight lowering of the forecast range would therefore come as no surprise, as we already pointed out in our latest report.