Puuilo Q4'25 preview: Focus on outlook for the current year

Translation: Original published in Finnish on 3/18/2026 at 7:10 am EET.

Puuilo will report its Q4 results on Wednesday, March 25 at around 8:30 am EET. We expect the company's earnings to have increased due to the expansion of its store network. We estimate that the company will propose a robust dividend and provide guidance for the 2026 financial year indicating earnings growth. We consider the share’s risk/reward highly attractive given its moderate valuation. Following a sharp decline in the share price, we are upgrading our recommendation to Buy (was Accumulate). At the same time, we revise the target price to EUR 14 (was EUR 14.5) due to slightly reduced estimates.

Cost pressures limit the scalability of growth

We estimate Puuilo's Q4 revenue to have grown 15%, in line with the consensus, to 99 MEUR. We expect this growth to have come particularly from new stores (+7 y/y). We also estimate that customer numbers in comparable stores developed positively. However, we expect the average purchase to have remained under pressure, as consumer caution directs spending towards more affordable options. Thus, we estimate that comparable revenue growth will remain slightly below historical averages (~5%).

We expect adjusted EBITA to have increased to 15.6 MEUR during Q4. Our estimate is in the same ballpark as the consensus (~15.8 MEUR). The profitability we have estimated (15.8% vs. Q4'25: 16.6%) is weighed down by costs caused by the rapid expansion of the store network. Conversely, cost pressure is likely to be alleviated by the continued increase in sales of profitable private label products. We expect financing costs to have increased due to higher financial and lease liabilities. We estimate that taxes will have increased in line with the earnings level. Thus, we project that EPS has grown at the same pace as EBIT, reaching EUR 0.13, which is in line with the consensus estimate. We estimate that Puuilo will propose a dividend of EUR 0.52 per share (consensus EUR 0.55), representing an increase from the basic dividend of EUR 0.46 in 2024 (EUR 0.70 including the special dividend). 

Guidance and conquering Sweden at the heart of the report

We have slightly lowered  our forecasts due to differences in store openings within the quarters (openings concentrated in H2). In addition, we have postponed the opening of one store by a year. We also adopted a more cautious stance regarding the expected development of the Finnish economy and increased expenses related to the company’s international expansion.

We expect the company to guide for strong growth and good profitability for the current year. Based on our and consensus estimates, the guidance ranges for 2026 could be 465–525 MEUR for revenue and 80–90 MEUR for adjusted EBITA. Growth will be driven by the expansion of the store network, and we expect the company to open at least 7 new stores in 2026. We recognize that growth percentages at the beginning of the year may be slightly more moderate, given that the store network will expand by 'only' five stores in H1 relative to the comparison period (in H1'24, the network expanded by eight stores). We are also closely monitoring management’s comments on the progress Sweden's pilot phase. As far as we know, the recruitment of the country manager is in its final stages, and the company has promised to provide more details on the pilot stores' timeline in spring 2026. We believe that the front-loaded costs associated with international expansion will weigh on profitability in the short term, which is why we expect the EBITA margin to remain flat for the next couple of years.

Expected return is very attractive

The stock's short-term valuation is elevated, which slightly limits the expected return. However, we believe this is justified given Puuilo's strong earnings growth outlook, which brings the multiples down to very attractive levels (2027-28e P/E 13x and EV/EBIT 11x) for a company generating a strong return on invested capital (~30%). The expected return is supported by a solid dividend yield of 4-6%. We therefore believe that the stock’s expected return is already very attractive, supporting a strongly positive view. The DCF model (EUR 15.8) also indicates significant upside in the share.