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Introduction & Market Context
Rugvista Group AB (RUG) reported a strong start to 2025 despite persistent consumer uncertainty across its key markets. During its May 8 earnings call, the Swedish rug retailer highlighted solid growth metrics and improved profitability, even as consumer confidence indices in France, Germany, and Sweden showed continued weakness.
The company’s stock has performed well recently, with shares closing at SEK 50.2 on May 7, up 4.37% for the day and significantly above its 52-week low of SEK 39.2, suggesting positive market anticipation ahead of the earnings release.
As shown in the following chart, consumer confidence remains unstable across Rugvista’s key European markets, with notable December dips and overall cautious sentiment:
Quarterly Performance Highlights
Rugvista delivered impressive top-line growth in Q1 2025, with net revenue reaching SEK 197.0 million, a 12.3% increase from SEK 175.9 million in the same period last year. This growth was driven by a significant rise in order volume, which jumped 17.3% to 96.6K orders compared to 82.4K in Q1 2024. The company also successfully attracted 69.3K new customers, up from 60.5K in the previous year.
The following chart illustrates the consistent quarterly order growth trend, with a 27.8% increase in the rolling 12-month average number of orders per quarter:
Despite the strong order growth, average order value (AOV) declined by 3.1% to SEK 2,864 from SEK 2,957 in Q1 2024, reflecting increased consumer price sensitivity. The company attributed this to several factors, including sales discount rate development, category mix changes, and price point down-trading within sub-categories.
The quarterly AOV development trend is visualized in this chart:
Detailed Financial Analysis
All geographical regions contributed to Rugvista’s growth, with the Nordics showing the strongest performance at 19.3% growth, followed by the DACH region (Germany, Austria, Switzerland) at 14.1%, and Rest of World at 8.5%.
The regional revenue breakdown is illustrated here:
Profitability metrics showed significant improvement, with gross margin expanding to 64.0% from 61.6% in Q1 2024. Marketing efficiency also improved, with marketing spend decreasing to 29.0% of revenue from 30.5% last year, while site traffic increased by 53%. These improvements helped drive EBIT to SEK 27.2 million, up from SEK 20.0 million, representing an EBIT margin of 13.8% compared to 11.4% in Q1 2024.
The following table details the improvement in variable costs and EBIT margin:
Inventory management remained disciplined, with inventory value at SEK 132 million as of March 31, 2025, representing 18.5% of last twelve months’ net revenue. This places inventory at the lower end of the company’s target range of 17.5%-22.5%.
The company maintained a strong cash position, increasing from SEK 219 million at the end of 2024 to SEK 222 million by March 31, 2025, supported by improved EBITDA performance.
Strategic Initiatives
Rugvista highlighted several strategic focus areas for 2025, including a warehouse relocation scheduled to begin in early June, ongoing assortment refinement, and customer journey improvements. The company continues to maintain high customer satisfaction, with Trustpilot ratings consistently between 4.71 and 4.80 on a 5-point scale over the past three years.
The consistent customer satisfaction trend is shown in this chart:
Forward-Looking Statements
While acknowledging ongoing uncertainty in the global market environment, Rugvista’s management expressed confidence in the company’s trajectory, characterizing Q1 as "a promising start to 2025." The company will hold its Annual General Meeting on May 21 in Malmö, Sweden.
The management team, led by CEO Ebba Ljungerud and CFO Joakim Tuvner, emphasized their continued focus on balancing growth with profitability while navigating the challenging consumer environment. The company’s ability to grow orders and revenue while improving margins suggests its strategy is proving effective despite economic headwinds.
Full presentation:
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