Earnings call transcript: Europris ASA Q3 2025 sees strong sales growth

Europris ASA reported robust financial results for the third quarter of 2025, with sales reaching NOK 3.5 billion, a 9% increase year-over-year. The company’s stock, however, experienced a 5.43% decline in pre-market trading, reflecting investor reactions to the earnings call and guidance. The group achieved a notable improvement in EBIT, rising 53% to NOK 256 million, and a gross margin increase of 1 percentage point to 40.7%.

Key Takeaways

• Europris ASA’s Q3 sales surged by 9% to NOK 3.5 billion.
• EBIT soared by 53% year-over-year, reaching NOK 256 million.
• Gross margin improved by 1 percentage point to 40.7%.
• The stock price dropped 5.43% in pre-market trading.
• The company plans significant store remodeling in Sweden.

Company Performance

Europris ASA demonstrated strong performance in Q3 2025, driven by seasonal sales and increased consumer spending. The Norwegian segment saw an 11.6% rise in sales, while the Swedish segment reported a 3.1% increase. The company successfully outperformed the broader retail market in Norway, benefiting from a price-conscious consumer base and effective campaign strategies.

Financial Highlights

• Revenue: NOK 3.5 billion, up 9% year-over-year.
• Group EBIT: NOK 256 million, a 53% increase from the previous year.
• Gross Margin: 40.7%, up 1 percentage point.
• Net Profit: NOK 154 million, an increase of NOK 70 million.

Market Reaction

Despite the positive financial results, Europris ASA’s stock fell by 5.43% in pre-market trading, closing at NOK 101.2. The stock’s decline may reflect investor concerns about future guidance and market conditions, despite the company’s strong performance and strategic initiatives.

Outlook & Guidance

Looking forward, Europris ASA aims to achieve NOK 5 billion in revenue in Sweden with a 5% EBIT margin by 2028. The company anticipates financial performance in 2026 to be similar to 2025, with gradual profit improvements expected from 2027. Key strategic initiatives include category harmonization and joint sourcing.

Executive Commentary

Espen Eldal, CEO of Europris ASA, highlighted the company’s consistent growth, stating, "Every year since we opened the first store, we have had growth." He also emphasized the goal of reaching NOK 5 billion in revenue by 2028, reflecting confidence in the company’s strategic direction.

Risks and Challenges

• Market Saturation: As Europris expands, it may face challenges in maintaining growth in mature markets.
• Macro-economic Pressures: Fluctuating consumer spending due to economic conditions could impact sales.
• Currency Fluctuations: Variations in exchange rates could affect the company’s financial performance.
• Competitive Pressure: Maintaining price leadership in a competitive retail environment remains crucial.
• Supply Chain Disruptions: Any disruptions could impact inventory levels and sales.

Q&A

During the earnings call, analysts inquired about the impact of store remodeling and margin improvements. The company clarified its strategy for the Swedish market and addressed expectations for future performance, focusing on operational efficiencies and consumer trends.

Full transcript - Europris ASA (EPR) Q3 2025:

Espen Eldal, CEO, Europris ASA: Good morning and welcome to the third quarter presentation of Europris ASA. My name is Espen Eldal, CEO of the company. Joining me on stage later today will be Stina Byre, the CFO, and Trine Engløkken, the IR Officer, will manage the Q&A session we have.

Supportive Voice/Collaborator, Europris ASA: At the end of the presentation.

Espen Eldal, CEO, Europris ASA: Please feel free to type in your questions as we speak. Very happy to have the event here at the office in Bjørvika, Oslo. Thank you for arranging this, and great thank you to the people that actually have showed up in person today. Today we actually have the biggest audience for the quarterly presentation for at least two years. That’s great. Let’s get started. This is a slide that I’m very proud of in Europris ASA, and it serves as a motivation for many of our employees. Every year since we opened the first store, we have had growth, and of course no one wants to be the.

Supportive Voice/Collaborator, Europris ASA: One that misses this streak.

Espen Eldal, CEO, Europris ASA: We will make sure that it continues. I think it shows some of the strength of the concept of ÖoB. Regardless of financial climate, we have been able to grow sales every year. Some years acquisition has been a big part of that growth, but in every year we have also delivered organic growth. 2025 also demonstrates very high growth. I think we have to go back at least a decade to see the same strong organic growth in Norway as we have seen this year. If we look at some highlights for the third quarter, Stina will provide more details on the financials later on. Overall, it was a sales growth over 9% driven by strong performance in segment Norway.

The gross margin increased, we have demonstrated good cost control, so the OPEX-to-sales ratio is reduced and that has resulted in EBIT for the group of NOK 256 million, which is an increase of 53% from last year. All in all, a very solid third quarter for the Europris group. We talk a little bit about the Europris chain before we continue with the ÖoB chain. Europris has over many years built a position as a seasonal destination in Norway. This year we really managed to capitalize on the nice summer weather. We saw large traffic to our stores and we were well prepared, we were well stocked with good shelves, we had a very good base assortment. We capitalized on the increased traffic and the demand that arise from the warm summer in Norway.

It is a strong execution of the campaigns, also a strong execution of the seasonal sales. The growth has been driven by higher footfall as the nice summer weather creates some demands and we see growth not only in the seasonal items but also in the base assortment, where we have seen high sales growth during the summer. It has been a strong market as well. The Europris chain grew by 12.1% in the third quarter and according to Statistics Norway, the broad variety retail market in Norway grew by 9.5%. It has been a strong market and we have been able to outperform in that market. It is good sales. If we look at the financial climate we’re in, we see that the consumer spending has been positively impacted by real wage increases and lower interest rates. Not only Europris has benefited from that.

We see that the total retail market in Norway is very positive. We also see that consumers are becoming more and more price conscious. That is something we have seen all over the last couple of years driven by the high inflation. This is kind of sticky. The shopping pattern has changed among the consumers and they keep following the prices more regularly. They also shop more on campaigns. This is strong and good news for a concept like Europris. We have driven more sales towards campaigns as we have a campaign-driven concept. We have been able to attract new customers on our private labels. We have increased the share of private label sales and these are of course low price points. We managed to give the customers what they want. They want low prices.

There was a big price test in Netavisen this October where they looked at Europris compared to the three large grocery chains in Norway. Europris was a clear winner on price just like we were last year as well. That is good for a low.

Supportive Voice/Collaborator, Europris ASA: Price concept as in Europris.

Espen Eldal, CEO, Europris ASA: If we look at the ÖoB chain, we have done several changes over the last year and we see that the category upgrades give good sales development in kitchen, home and interior and DIY. It’s not material enough to really.

Supportive Voice/Collaborator, Europris ASA: Change the bottom line.

Espen Eldal, CEO, Europris ASA: We see that we managed to shift the consumers to buy more non-food items.

Supportive Voice/Collaborator, Europris ASA: We see we managed to get them.

Espen Eldal, CEO, Europris ASA: To buy more campaigns, the retail basics, the mechanism we introduced that works, but still the results are not material enough.

Supportive Voice/Collaborator, Europris ASA: To give significant results.

Espen Eldal, CEO, Europris ASA: We have changed from negative like for like to positive like for like. We have lifted the gross margin, but it’s not enough to make the turnover we need. What becomes more and more clear for us is that we need to do the full remodeling of the stores in order to get the turnaround process we want in Sweden, and especially to.

Supportive Voice/Collaborator, Europris ASA: Attract new customers to the stores.

Espen Eldal, CEO, Europris ASA: Need to reestablish ÖoB as a.

Supportive Voice/Collaborator, Europris ASA: Relevant shopping destination for more customers.

Espen Eldal, CEO, Europris ASA: We see the very good results from the pilot stores where we have built two new stores or remodeled two stores in Sweden based on the Europris concept. The first one opened in Uddevalla in June and that store basically ticks.

Supportive Voice/Collaborator, Europris ASA: Of all the boxes that we want.

Espen Eldal, CEO, Europris ASA: We see increased sales from higher footfall to the stores. We see increased sales of non food items. We see a higher margin also.

Supportive Voice/Collaborator, Europris ASA: See a higher basket.

Espen Eldal, CEO, Europris ASA: Very promising and good results from that remodeling. The second remodel store in Arninge outside.

Supportive Voice/Collaborator, Europris ASA: Of Stockholm was opened early in September.

Espen Eldal, CEO, Europris ASA: That basically gives us the same.

Supportive Voice/Collaborator, Europris ASA: Results as what we have seen from Uddevalla.

Espen Eldal, CEO, Europris ASA: The third pilot opened three weeks ago in Malmö.

Supportive Voice/Collaborator, Europris ASA: The fourth pilot will open next week outside of Stockholm.

Espen Eldal, CEO, Europris ASA: We will have them four pilots, and we will run that for a period. We get very positive feedback from the.

Supportive Voice/Collaborator, Europris ASA: Customers and the staff in the store.

Espen Eldal, CEO, Europris ASA: Layout, on how it works. It’s evident that we do these remodelings to get turnaround process.

Supportive Voice/Collaborator, Europris ASA: In Sweden.

Espen Eldal, CEO, Europris ASA: We are now executing a large store remodeling program over the next two years. We will remodel 40 to 45 stores every year in 2026 and 2027. There will be some initial negative financial impacts during the remodeling. The stores will be closed for two to four weeks, which means that we.

Supportive Voice/Collaborator, Europris ASA: Will have lost sales.

Espen Eldal, CEO, Europris ASA: In addition, we will do some discounting.

Supportive Voice/Collaborator, Europris ASA: Ahead of the closing period, we will sell out the discontinued goods in order to have fresh goods when we open the new stores.

Espen Eldal, CEO, Europris ASA: We will do the remodeling with our own staff. It will be dedicated remodeling teams employed by ÖoB, and that will of course be part.

Supportive Voice/Collaborator, Europris ASA: Of the OPEX for next year.

Espen Eldal, CEO, Europris ASA: Any improvements from sales uplifts anticipated with the remodeling next year will be.

Supportive Voice/Collaborator, Europris ASA: Offset by the cost associated with the remodeling of the stores.

Espen Eldal, CEO, Europris ASA: We expect the financial results in Sweden in 2024 to be on par with 2025.

Supportive Voice/Collaborator, Europris ASA: We will see a gradual.

Espen Eldal, CEO, Europris ASA: Uplift in the profits from 27 and.

Supportive Voice/Collaborator, Europris ASA: The major uplift will come in 2028, the year after stores are modernized.

Espen Eldal, CEO, Europris ASA: We will provide some more detail on the rollout plan and the financial impacts.

Supportive Voice/Collaborator, Europris ASA: In the next quarterly presentation, after we have evaluated the four pilot.

Espen Eldal, CEO, Europris ASA: Stores, we maintain firm on the high ambitions we have in Sweden. We will grow the revenues to NOK 5 billion with a 5% EBIT margin by.

Supportive Voice/Collaborator, Europris ASA: The end of 2028.

Espen Eldal, CEO, Europris ASA: The first step in this plan is.

Supportive Voice/Collaborator, Europris ASA: To do category harmonization and joint sourcing, that is well on the way.

Espen Eldal, CEO, Europris ASA: This is, you know, like the base, the store remodelings and then improving the customer experience.

Supportive Voice/Collaborator, Europris ASA: That is the store remodeling plan.

Espen Eldal, CEO, Europris ASA: That is the key to really get the results. You need to do the category.

Supportive Voice/Collaborator, Europris ASA: Harmonization and joint sourcing first, then we will improve the customer experience.

Espen Eldal, CEO, Europris ASA: That is needed in order to.

Supportive Voice/Collaborator, Europris ASA: Attract new customer segments into the stores.

Espen Eldal, CEO, Europris ASA: Besides that, we are working on strengthening.

Supportive Voice/Collaborator, Europris ASA: The execution across the value chain, which means that we are sharing the best.

Espen Eldal, CEO, Europris ASA: Practice, implementing the retail mechanisms from ÖoB also into Europris, you know.

Supportive Voice/Collaborator, Europris ASA: Working on the sales culture in the company.

Espen Eldal, CEO, Europris ASA: As part of that culture, we have hired a new CEO to ÖoB.

Supportive Voice/Collaborator, Europris ASA: That is Anders Lorentzson.

Espen Eldal, CEO, Europris ASA: He has a strong track record.

Supportive Voice/Collaborator, Europris ASA: More than 20 years experience in the Swedish retail sector. He’s worked with food retail in the ICA group, he’s worked with electronics in Expert, and he’s most recently worked with non food items and home textiles as CEO of Hemtex since 2018.

Espen Eldal, CEO, Europris ASA: Anders will join us actually next week.

Supportive Voice/Collaborator, Europris ASA: Starting off with a month in Norway to learn the commercial tricks and treats of Europris. He will take over full responsibility sometime in December in ÖoB.

Espen Eldal, CEO, Europris ASA: We’re really looking forward to have.

Supportive Voice/Collaborator, Europris ASA: Anders joining the team and the Europris group.

Espen Eldal, CEO, Europris ASA: With that, I will leave the floor.

Supportive Voice/Collaborator, Europris ASA: To Stina to take the financial details.

Stina Byre, CFO, Europris ASA: Thank you Espen and good morning everyone. I will start with the financials for segment Norway. The strong performance this year continued in the third quarter with sales of NOK 2.5 billion, up 11.6%, and an EBIT of NOK 293 million, up almost 38%. The average chain had a total sales growth of 12.1% and a like-for-like growth of 10.7%. As Espen said, a warm summer had a positive impact on a seasonal destination like Europris. Higher footfall was the main driver behind the strong performance. We also saw more articles in the basket. Sales growth was broadly based from seasonal items, campaigns, and the base assortment. One store was opened in the third quarter, bringing the total number of new stores this year to six. Our pure play companies had sales of NOK 155 million, and if we exclude the Luniem last year, that’s a growth of 3.5%.

Lekkikasen has improved their performance. While there is a challenging knitting market in Norway for Stykjemeka, the gross margin was 44.6%, up 0.9 percentage points or up 0.5 percentage points if we exclude impact from unrealized currency on hedging contracts and account payables. Seasonal items had a higher gross margin this year, impacting the gross margin positively. The OPEX increase of 8.7% was impacted by eight more directly operated stores this year and also costs related to higher volumes. We are happy to see that measures taken to improve efficiency in the value chain continue to pay off and we saw that the OPEX-to-sales ratio improved by 0.7 percentage points. Moving on to segment Sweden, sales were SEK 1 billion with a reported sales growth of 3.1%. In local currency, sales were down 0.2%.

The ÖoB chain had two fewer stores and in local currency the like-for-like sales improved by 0.4%. This means that although we do see positive development from upgraded non-food categories and remodeled stores, and also that initiatives to improve campaign sales have given results, this has yet to add materially to the total. As Espen said, to attract new customer segments there is a need for store remodeling and we see higher footfall and sales. In our pilot stores, the gross margin was 31.1%, up 0.4 percentage points. Half of this improvement was related to unrealized currency effects. In addition, an uplift in non-food sales had a positive product mix. OPEX showed a reported increase of 1.8% but was down 1.4% in local currency. This change was positively impacted by one-off cost and costs related to IT projects.

Last year with a total of SEK 13 million, the segment had an EBIT loss of SEK 37 million, an improvement of SEK 8 million compared to last year’s loss of SEK 45 million. I will briefly sum up the third quarter for the group. Sales were NOK 3.5 billion, up 9% or up 8% in constant currency. The gross margin was 40.7%, an improvement of 1 percentage point or up 0.6 percentage points if we exclude impact from unrealized currency. I would like to give a reminder that the group hedges up to six months and that the inventory also takes some time to turn. This impacts when any changes in NOK compared to purchasing currency has an impact on the cost of goods sold. As far as any margin impact is concerned, that will depend on sales prices in the market when a product is sold.

The OPEX-to-sales ratio improved by 0.6 percentage points to 25.9%. EBIT grew by close to 53% to NOK 256 million and the net profit to parent was NOK 154 million, up NOK 70 million, of which NOK 14 million of the increase was related to unrealized impact from interest rate swaps for the first nine months. It’s important to keep in mind that group figures include Segment Sweden for four more months this year. This obviously has a positive impact on sales, but on the other hand it has a dilutive impact on both the gross margin and the OPEX-to-sales ratio. Sales were NOK 10.3 billion and EBIT was NOK 642 million, where Segment Norway delivered a strong EBIT growth of almost 23% while Segment Sweden for the first nine months delivered an EBIT loss of SEK 186 million. Net profit was NOK 350 million, down NOK 46 million.

Last year was positively impacted by financial effects from the ÖoB transaction with a net NOK 34 million. In addition, there is a higher unrealized loss on interest rate swaps this year compared to last year. I will comment on the figures for the first nine months. Cash from operating activities were NOK 254 million. Change in net working capital is normally negative in the first nine months due to seasonal fluctuations, but the NOK -735 million this year was more negative than last year. That was primarily from timing of account payables, but also from a planned inventory build up to support sales. Net cash from financing activities were less negative than last year as more of the credit facilities have been drawn upon. Net change in cash was minus NOK 247 million and the net debt was NOK 5.1 billion or NOK 1.8 billion excluding lease liabilities.

Cash and liquidity reserves decreased by NOK 200 million to NOK 1.16 billion. I will hand it back to Espen to give you the outlook.

Espen Eldal, CEO, Europris ASA: Thank you, Stina. We are entering now the fourth quarter, which is, you know, historically the most important quarter in retail. The small seasons are, you know, coming almost every week. We have Halloween this week, big event. We’re starting off the Christmas season next week. Of course, you have not only Black Week or Friday, you have Black November. It’s a pretty good lineup of events ahead of us. I think we delivered a strong start to this year with good performance in the first three quarters. We see that the consumer spending is driven by the better financial situation in the markets. We have seen increases, decreased interest rates. We have also seen lower inflation and a real wage growth for the consumers. We expect that to drive sales.

Supportive Voice/Collaborator, Europris ASA: Also into the fourth quarter.

Espen Eldal, CEO, Europris ASA: Most important event ahead of Europris right now is the RESTORE remodeling program that we will launch in Sweden next year. Remodeling 40 to 45 stores both in 2026 and 2027 and in the first year. The positive effects from those remodelings will be offset by the project cost associated. We remain confident in our long term ambition and target, which is to grow sales in Sweden to NOK 5 billion with a 5% EBIT margin in 2028. I think that closes the presentation and I will invite Stina back on stage and we will actually open up for questions. Trine, maybe we should. If there are any, we could start with questions from the room, then we move on to the web.

Yeah. Ula Martin, Vesco, DNB, Carnegie. You expect the ÖoB EBIT in 2026 to be on par with 2025. What are your expectations for 2025? Do you find consensus EBITDA expectations fair or why shouldn’t the ÖoB EBIT improve in 2026?

We have been quite clear that we expect the financials of Europris ASA in 2026 to be on par with 2025. The reason for giving that is.

Supportive Voice/Collaborator, Europris ASA: Of course, we saw that analysts.

Espen Eldal, CEO, Europris ASA: Have phased in positive effects from ERBE.

Supportive Voice/Collaborator, Europris ASA: Earlier than what we see is possible, as with the remodeling will take some.

Espen Eldal, CEO, Europris ASA: Time and there will be some initial negative financial impacts from the project. Regarding the fourth quarter, I would expect EBIT to perform slightly better than last year like we did in the third.

Quarter this year and another one from Moulin. Can you give any more color on the expected negative impact of the remodeling in Arninge next year and how much is this expected to impact the figures negatively?

We will come back with a more detailed data set when we have had the time to evaluate the four pilot stores. We have four months of data on one pilot.

Supportive Voice/Collaborator, Europris ASA: That is not sufficient to make you.

Espen Eldal, CEO, Europris ASA: know a good data sample. We will have the four pilots evaluate those, and we’ll present the data.

Supportive Voice/Collaborator, Europris ASA: When we present the fourth quarter results at the end of January.

Espen Eldal, CEO, Europris ASA: You will receive data on.

Supportive Voice/Collaborator, Europris ASA: How you should model this in for the full year.

Espen Eldal, CEO, Europris ASA: Also, you know the timing of how many remodelings we will do every quarter.

Supportive Voice/Collaborator, Europris ASA: The cost associated and also the uplift you should expect. That will be a full data set where it’s able to do the calculations.

What was the consumable and private label share in Europris and ÖoB in Q3?

Stina Byre, CFO, Europris ASA: We saw in ÖoB that we had a higher share of non food and that’s very pleasing as we have upgraded categories. That was up 0.8% in the third quarter. We have a total share of consumables in Sweden of 73% to 74% as we also harmonized the way that we measure, harmonized in the same way that we measure the Europris product range. It’s a bit higher than the 70% we have previously communicated. As for Norway, there has been very good sales of both consumables and non food, but the growth for consumables has been higher. In the third quarter it was around a little bit more than 55% with an increase of 0.7 percentage points.

A question from hkonfegle. Can you comment on the high OPEX growth for Norway in the quarter? For Norway, why did not gross margin improve further by strong NOK and lower freight? Are you alongside competition seeing lower sourcing costs?

If I start with the OPEX, I agree at first sight it may look like a big cost increase, but as I mentioned when I was going through the presentation, a higher number of directly operating stores obviously impacts the number, but it also gives sales and also most of our sales is volume driven and we have a very good improvement in the OPEX-to-sales ratio of 0.7%. I think that the organization has actually done a very good job when it comes to OPEX this year and the gross margin. Sorry, there were two questions there. We have seen an improvement in the gross margin in Norway with an uplift in the seasonal product range. As I also said, it can take some time before changes in currency, freight, all this washes in to the products that are actually sold.

At the end, one must also remember that we are a low price chain and we need to follow the market prices. That will also then decide how the margin ends up.

Espen Eldal, CEO, Europris ASA: I think just to add on the margin side, we see that there are.

Supportive Voice/Collaborator, Europris ASA: Some comments in the market that a change in the NOK versus U.S. dollars should immediately give an improved gross margin.

Espen Eldal, CEO, Europris ASA: We do the hedging like you explained, Trine, and that will.

Supportive Voice/Collaborator, Europris ASA: Take some time to get the effects in.

Espen Eldal, CEO, Europris ASA: That is also assuming that the market prices will remain stable.

Supportive Voice/Collaborator, Europris ASA: We have seen historically that, you know, the shifting currency is actually not the driver of the gross margin. If you look on the historical numbers, we see that hedging basically makes sure that you have a stable margin and that it is, you know, operational improvements that drive your increase in gross margin, like we have seen this quarter.

Espen Eldal, CEO, Europris ASA: We’re selling more non-food items.

Supportive Voice/Collaborator, Europris ASA: We see good increase in base assortment with margins, and we also see increase in private label products. That is the driver of the margin increase we’ve seen in this quarter. That will also be what we’re working on going forward.

The next question comes from Peter Nystrom, ABG, regarding the Europris ASA 2026 guidance. Is this development in line with what you expected 6 to 12 months ago, or has the outlook become more challenging? If yes, what has changed?

Espen Eldal, CEO, Europris ASA: Nothing has basically changed. I think we have reported what we have said the whole time, that we do some step changes, small changes to the campaign model, we introduce some new categories, but we have seen all the time that we manage to shift the consumers and the way they trade, but it doesn’t really add up to a.

Supportive Voice/Collaborator, Europris ASA: Big change in the basket.

Espen Eldal, CEO, Europris ASA: That is basically because we see that the current customers of ÖoB have a limited capacity to spend money, and you know, we manage to shift this spending across the categories, but it doesn’t really.

Supportive Voice/Collaborator, Europris ASA: Drive an increase in the footfall.

Espen Eldal, CEO, Europris ASA: That is what we were looking for. We have also always said that, you know, we need to improve the customer experience in order to attract new customer segments. That is what we’re doing. We have always guided on the 28th, and that we stay firm on. We have been not sure about how this will evolve in that transition period, but now when we have done the tests, we’ve done the pilot so far, we see that it’s evident for us.

Supportive Voice/Collaborator, Europris ASA: That we need to do the remodeling, and that is what will bring the step change and the new customer segments into the stores in Sweden.

Espen Eldal, CEO, Europris ASA: That’s why we also give such a clear guidance on it now, because.

Supportive Voice/Collaborator, Europris ASA: Now we have more visibility after we have done the pilots.

That was the last question.

Espen Eldal, CEO, Europris ASA: We say thank you and we see you next time.

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