Rusta Q4 2024/25 presentation: Sales surge 12.6% as expansion accelerates

Published 17/06/2025, 08:44
Rusta Q4 2024/25 presentation: Sales surge 12.6% as expansion accelerates

Introduction & Market Context

Rusta AB (STO:RUSTA) shares jumped 12.17% on Tuesday after the Scandinavian home goods retailer reported accelerated fourth-quarter sales growth and announced an increased dividend. The company presented its Q4 and full-year 2024/25 results on June 17, 2025, highlighting robust performance across all markets despite currency headwinds.

The retailer, which operates 225 stores across Sweden, Norway, Finland, and Germany, saw its stock reach 80.65 SEK, reflecting investor confidence in the company’s expansion strategy and improved profitability metrics.

Quarterly Performance Highlights

Rusta delivered impressive fourth-quarter results, with net sales growing 12.6% to 2,553 million SEK compared to 2,268 million SEK in the same period last year. Like-for-like sales growth excluding currency effects reached 8.6%, demonstrating strong organic performance despite a negative currency impact of 1.9% and a 1.0% negative calendar effect due to the leap year.

As shown in the following chart of quarterly financial performance:

The company’s gross profit increased by 7.0% to 1,044 million SEK, representing a gross margin of 43.0%. While EBITA margin remained slightly negative at -0.6% for the quarter, this represented a significant 1.6 percentage point improvement compared to the previous year.

Rusta reported strong development across all segments, with increased average ticket value and visitation rates. The company’s loyalty program now boasts 6.4 million Club Rusta members, with the 18-28 age group representing the fastest-growing demographic. Club members’ average ticket size is 35% higher than non-members.

Full-Year Financial Analysis

For the full fiscal year 2024/25, Rusta delivered solid results with net sales growth of 6.4% to 11,828 million SEK and like-for-like growth excluding currency effects of 3.2%. The company’s annual performance is illustrated in the following chart:

Gross profit for the year increased by 5.4% to 5,095 million SEK, maintaining a healthy gross margin of 43.5%. EBITA grew by 12.2% to 853 million SEK, resulting in an EBITA margin of 7.2% for the full year. Earnings per share increased by 17.4%, outpacing both sales and EBITA growth.

The company’s segment performance showed strength across all markets, as illustrated in the following breakdown:

Sweden remained the strongest market with an EBITA margin of 18.0% for the full year, while Norway achieved 11.1%. The online segment demonstrated profitability with a 1.2% EBITA margin for the year, showing improvement despite being a relatively newer channel for the retailer.

Several key factors drove Rusta’s profit improvement during the fiscal year, as shown in this analysis:

Strategic Initiatives

Rusta continues to execute an ambitious expansion strategy, opening 13 new stores during the fiscal year, including 6 in the fourth quarter alone. The company celebrated its 10-year anniversary in Norway by opening its 50th store in that market.

The retailer’s geographical footprint and expansion plans are detailed in the following map:

With 47 signed or approved new locations and 180 prioritized store locations identified, Rusta plans to open between 50-80 new stores over the next three years. This expansion will be distributed across its existing markets, with approximately 60 planned openings in Sweden, 30 in Norway, and 30 in Finland.

Other strategic milestones during the year included the establishment of a new sourcing office in Turkey and the approval of the company’s climate targets by the Science Based Target (NYSE:TGT) initiative.

Forward-Looking Statements

The Board of Directors has proposed increasing the dividend to SEK 1.45 per share, up from SEK 1.15 last year. This represents 47% of net profit, up from 43% in the previous year, and aligns with the company’s dividend policy of distributing 30-50% of net profit.

In a significant announcement, CEO Göran Westerberg informed the Board of his intention to leave his position no later than June 30, 2026. The Board has initiated the process to appoint his successor, providing ample time for a smooth transition.

Regarding current trading conditions, Rusta reported that the summer season (April and May) has started better than last year, though it expects softer comparisons in the second half of Q1. The company maintains a positive long-term outlook, citing its record store pipeline, positive foreign exchange effects, implementation of a bonded warehouse, and all projects proceeding according to plan.

The company’s financial health remains strong, as illustrated in the following balance sheet and cash flow metrics:

Rusta’s net working capital as a percentage of last twelve months’ sales increased slightly from 11% to 12%, while net debt excluding IFRS 16 as a percentage of LTM sales moved from -0.17x to 0.09x, still indicating a very strong balance sheet position to support future growth.

The company reaffirmed its medium-term financial targets of approximately 8% annual organic net sales growth, like-for-like growth above 3%, and an EBITA margin of around 8%.

Full presentation:

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