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Introduction & Market Context
Kid ASA (OB:KID) reported its first quarter 2025 results on May 15, showing continued revenue growth despite challenges to profitability. The Nordic home textile retailer, which operates through its Kid Interior and Hemtex brands, saw group revenues increase by 5.3% to MNOK 733.7, though this was accompanied by margin pressure and increased operating expenses.
The company’s stock closed at NOK 156 on May 14, down 0.76% ahead of the presentation, and has traded between NOK 120 and NOK 161.20 over the past 52 weeks.
Quarterly Performance Highlights
Kid ASA delivered group revenue growth of 5.3% (15.0% in constant currency) to MNOK 733.7 in the first quarter. Like-for-like revenues increased by 2.9%, while online revenues grew by 6.6% to represent 12.3% of total sales.
By segment, Kid Interior revenue grew by 3.3% to MNOK 452.4 with like-for-like growth of 1.8%, while Hemtex revenue increased by 8.7% to MNOK 281.3 with like-for-like growth of 4.7%.
As shown in the following revenue breakdown chart:
However, profitability metrics showed some pressure. Gross margin decreased by 0.9 percentage points to 60.6%, attributed to increased freight costs, higher volumes of seasonal products sold on campaign, and the absence of early price adjustments that positively impacted the previous year.
The following chart illustrates the gross margin trend:
Operating expenses increased by 8.3%, with employee benefit expenses up by MNOK 12.5 due to salary increases and more working hours, while other operating expenses rose by MNOK 12.7 driven by activity levels and the expanded store portfolio. Approximately MNOK 5 in non-recurring costs were booked as other operating expenses and rental costs.
The OPEX breakdown and drivers are shown here:
As a result of these factors, EBITDA decreased by MNOK 9.2 to MNOK 115.3, and the company reported an EPS of NOK -0.74 for the quarter.
Store Expansion and Optimization Strategy
Kid ASA continues to focus on store portfolio optimization, with six store projects completed during the quarter. The company’s data clearly demonstrates that larger stores deliver better financial performance, with stores over 1,000 square meters generating average revenue of MNOK 7.7 and store contribution of MNOK 24.7, significantly outperforming smaller format locations.
The following chart illustrates the relationship between store size, revenue, and contribution:
Since 2021, Kid ASA has strategically increased the average store size in its portfolio, with Kid Interior and Hemtex growing by 8.1% and 17.4% respectively. This strategy appears to be yielding results, as store projects from 2023 have shown significantly higher compound annual growth rates (10.9% for Kid Interior and 16.5% for Hemtex) compared to non-project stores.
The company’s store portfolio metrics by segment are detailed here:
The current store network and recent activity are illustrated in this overview:
Financial Position and Outlook
Kid ASA reported negative cash flow from operations of MNOK 256.0 in Q1, primarily due to working capital changes and planned inventory build-up. The company’s cash flow components are broken down as follows:
The company maintains cash and available credit facilities of MNOK 590.0, including an unused term-loan facility of MNOK 148. Net interest-bearing debt excluding IFRS 16 leasing liabilities stands at MNOK 649.9, with a gearing ratio (excluding IFRS 16 effects) of 1.07x.
Kid ASA’s financing structure is detailed here:
Looking ahead, the company has signed ten store projects for Kid Interior and six for Hemtex in the first half of 2025, with an ambition to increase the number of Extended stores in the Swedish market. The company is also piloting a digital launch of the Hemtex brand to Germany and other EU markets.
A significant infrastructure investment is the new central warehouse in Sweden, which was completed in January 2025 and increases storage area by approximately 40%. The facility is expected to be operational by mid-2025, with non-recurring costs of MNOK 30 estimated for 2025.
The company also noted the appointment of Marianne Fulford as the new CEO, signaling potential leadership changes in strategy or execution going forward.
Full presentation:
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