Nelly Group interim report for the first quarter of 2026

Q1 2026 – Financial highlights
Net revenue was SEK 243.3 (247.8) million, corresponding to a decline of -1.8% (11.5%)
Gross profit was SEK 134.5 (127.8) million, corresponding to a gross margin of 55.3% (51.6%)
Operating profit was SEK 8.0 (19.9) million, corresponding to an operating margin of 3.3% (8.0%)
Profit after tax was SEK 5.1 (16.3) million, corresponding to earnings per share of SEK 0.17 (0.54)
Cash flow from operating activities was SEK -26.4 (-13.0) million
Cash and cash equivalents amounted to SEK 215.3 (172.6) million as at 31 March and external credit facilities were unutilised

Material events during the quarter
Nelly Group AB (publ) (‘Nelly’) announced on 9 March 2026 that CFO Niklas Lingblom was leaving his role at Nelly. He is replaced by Josefin Dalum, who starts as CFO on the same date.

Material events after end of quarter
No material events have been reported since the end of the quarter.

CEO’s comments

A soft start to 2026
The first quarter did not meet our expectations. Market conditions remained challenging and we did not respond quickly enough to early trend signals at the start of the season. As a consequence, net revenue decreased by 1.8% (11.5%) to SEK 243.3 (247.8) million. The gross margin increased to 55.3% (51.6%), but the operating profit was impacted by investments in the company's long-term development and hence amounted to SEK 8.0 (19.9) million, corresponding to an operating margin of 3.3% (8.0%). Although the f irst quarter is historically the weakest, we are still not satisfied with this result. The past months have highlighted the areas we need to further improve for NELLY to be able to perform consistently even in rapidly changing market conditions.

The assortment did not resonate with our customer
The main explanation for the quarter's result is that the assortment as a whole did not resonate strongly enough with our customer. Certain categories, such as jeans, pants and swimwear, grew, but overall, the level of newness in the assortment was too low and the defining fashion trends of the season were given too little space in our offering. In addition, we were not quick enough in building stock depth on products that showed strong potential early in the season. Despite increased investment in marketing, this resulted in online traffic in the Nordics declining by 2.9%, conversion weakening to 1.8% (1.9%) and the average basket decreasing by 6.0% compared to the previous year.

This quarter's result is a reminder that an attractive assortment is a prerequisite for being able to drive traffic, conversion and average basket size. At the same time, there are positive developments worth highlighting, not least that NELLY's own brand share increased to 62.7% (50.1%) and that the external brand portfolio was strengthened with well-known international names such as Diesel, Nike and Lois. Alongside this, our long-term work to strengthen our purchasing and production processes continues, with the aim of improving the accuracy of the assortment and our ability to respond quickly when market or weather conditions call for it. Ultimately, our decisions must always be determined by the customer's preferences in any given season, even when this means variations in the gross margin or, as was the case for this quarter, a somewhat higher return rate of 27.3% (24.8%), reflecting that certain trends inherently carry higher return rates.

A quarter of negative sales growth naturally puts the spotlight on the cost base, and it is important to point out that the cost increases year-on-year reflect deliberate investments, not a departure from the discipline we have built. Marketing costs increased, driven in part by a more challenging sales period that required higher intensity, and in part by our continued expansion in the German market. Administrative and other operating expenses were also higher, reflecting several additions to strengthen the business that were not present in the prior-year period, including the flagship store in Copenhagen and a number of new roles that are required going forward to further develop the company.

Our strategy holds firm, with profitable growth as our focus
A challenging quarter does not change our strategy. A carefully curated assortment, where our own brands blend with well-known international brands, remains at the core of positioning NELLY as the most sought-after fashion destination for our target audience. Profitable growth remains our north star, and customer prefer ences our primary compass.

I would like to end by expressing my gratitude to all the customers who choose NELLY – something we never take for granted. An equally warm thank you to all my colleagues, whose dedication and commitment endure despite a challenging period. With the learnings from the past quarter to guide us, our work continues with renewed focus.

Helena Karlinder-Östlundh,
CEO Nelly Group AB

Nelly Group AB (publ)
Box 690
501 13 Borås, Sweden
Corp. ID 556035-6940
Registered office: Borås
Visiting adress: Lundbygatan 1, Borås

Webcast on the interim report
Analysts, investors and the media are invited to a webcast presentation of Q1 on 28 April at 9 a.m. CEST. The presentation will be given in English by Helena Karlinder-Östlundh, CEO, and Josefin Dalum, CFO. The webcast will be made available on the Nelly Group website.

Link to webcast: https://nelly.videosync.fi/2026-04-28-q1

To listen to the presentation by phone, the following call-in 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: 5004272#
User ID: 28379#