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Matas Group reported its Q2 2025 earnings, showing steady revenue growth but facing a stock price decline. According to InvestingPro data, the company's diluted EPS for the last twelve months stands at $1.18, with forecasts of $1.61 for fiscal year 2026. The immediate market reaction saw Matas' stock price fall by 6.37%, closing at $19.13, down from the previous close of $20.09. This decline comes despite the company's positive performance metrics and strategic initiatives, with InvestingPro analysis suggesting the stock is currently undervalued compared to its Fair Value.
Key Takeaways
- Revenue grew by 5% reported and 4.4% currency neutral.
- Stock price dropped by 6.37% following the earnings release.
- E-commerce revenue increased by 12.5%, highlighting digital growth.
- Introduced new brands and expanded digital platforms across Nordic markets.
Company Performance
Matas Group demonstrated robust performance in Q2 2025, with a total revenue growth of 5% on a reported basis and 4.4% currency neutral. The company's EBITDA margin stood at 12.4% before special items, reflecting stable operational efficiency. The e-commerce segment was a significant contributor, with a 12.5% revenue increase, showcasing the company's successful digital strategy. Matas also gained market share in its KICKS brand, despite challenging market conditions in Denmark and Sweden.
Financial Highlights
- Revenue growth: 5% reported, 4.4% currency neutral
- EBITDA margin: 12.4% before special items
- E-commerce revenue growth: 12.5%
- Gross margin: Flat, with underlying improvements
Market Reaction
Despite solid financial performance, Matas' stock fell by 6.37% on the day of the earnings announcement. The stock's decline might be attributed to broader market trends or specific investor concerns not detailed in the provided data. The stock's 52-week range is between $109 and $155.80, indicating the current price is closer to the lower end of its range.
Outlook & Guidance
Matas maintained its full-year guidance, projecting revenue growth between 3% and 7% and an EBITDA margin of around 15%. The company plans to continue its share buyback program and focus on operational excellence and cash generation. These initiatives are expected to support Matas' long-term growth strategy.
Executive Commentary
CEO Gregers Wedell-Wedellsborg expressed confidence in the company's trajectory, stating, "This is a business that is moving forward at full steam." CFO Per Johannesen Madsen highlighted the company's proactive approach to managing foreign exchange impacts, noting, "We do not consider FX just to be an externality."
Risks and Challenges
- Low consumer confidence in Denmark could impact sales.
- Soft market conditions in Sweden may continue to pose challenges.
- Foreign exchange fluctuations could affect profitability.
- Increasing competition in the beauty and well-being segments.
- Potential supply chain disruptions impacting product availability.
Q&A
During the earnings call, analysts inquired about the underlying growth of the KICKS brand and the impact of the hot summer on sales. The management also addressed questions on foreign exchange headwinds and the role of artificial intelligence in retail operations.
Full transcript - Matas (MATAS) Q2 2026:
Arboretor, Call Moderator/Operator: Welcome to Matas Group's Q2 2025 financial presentation. Today's call is being recorded. All participants will be in a listen-only mode throughout the presentation, and afterwards there will be a question-and-answer session. To ask a question, please press five-star to place yourself in the queue. I would now like to introduce CEO Gregers Wedell-Wedellsborg and CFO Per Johannesen Madsen. Gregers, please begin.
Gregers Wedell-Wedellsborg, CEO, Matas Group: Thank you, Arboretor, and welcome to everyone covering, looking at Matas. We will be covering the first half of the financial year and, of course, a special call as well. This is my last call as CEO of Matas Group. We are reporting a quarter that is, in our view, a rock-solid quarter, but also an eventful quarter with a lot of moving parts. We are going to cover why this is the way we interpret the quarter. What we see is a Matas Group delivering on our ambitions and a Matas Group progressing on our strategy. As we look at the quarter, this is a stable business with a lot of moving parts, but I will get into that. I will start out by doing the general comments.
I will hand over to Per for a deeper look at the financial results, and then we will take a step back and look at the totality of the quarter, but maybe also talk about what does this quarter tell us about the state of our total business. First of all, I want to go back to our Q1 reporting and the main message from our Q1 reporting, namely that two years after the acquisition of KICKS and two years into the integration of KICKS and Matas into Matas Group, we are entering a new phase. We have been investing in infrastructure in our two warehouses, and we have been investing and working on integration. At the same time, we have seen KICKS and Matas grow and even outgrow the market for two years.
We are shifting into a phase that is more focused on operational excellence, more focused on cash generation while maintaining the ambition to grow faster than the market and reach our long-term financial ambitions. I just want to point out that this is still the case. This is exactly how we see the business with a couple of add-ons. In the quarter, and I will speak more to this, we have launched our one digital platform across the Nordics using the Matas platform on the KICKS markets. I will get into what that means. It offers a lot of opportunity and a lot of benefits to the business.
To substantiate and underline that we feel that the business is in good shape, I think the one number that stands out to me in this report is that our transactions, so the number of shoppers that have come into the business, is up by 500,000 in the first half of the year, 200,000 up only in the Q2. That is the ultimate sign of health for a business that customers, they flow into our stores, they flow into our online businesses. Fundamentally healthy, fundamentally progressing. We are also seeing margin improvement. We have had some FX headwinds, but underlying margins are improving as expected as well. Therefore, we feel confident to maintain our full-year guidance, but also no changes to our long-term financial ambitions, no changes to our strategy. It is about execution, execution, execution. All right, let's dig into the quarter.
We see continued growth. We see the underlying margin going up despite some negative in-quarter effects, and I will speak to those in more detail affecting our KICKS business. 4.4% growth year on year, currency neutral, reported 5% growth, 12.4% EBITDA margin before special items. If we adjust for FX, we see 12.7% against 12.5% of last year. What's going on in the quarter? We see continued growth, and the growth trajectory continues. What we have to be mindful of is that the launch of the One Digital Platform drags our group sale by about 1%, all in KICKS because Matas has made no changes, so all in KICKS. On group sales, around 1% drag on sales.
Matas growing very briskly, helped by a hot summer because Matas sells a lot of sun care, but also driven by the assortment expansion strategy that we have been pursuing since August 2021. So a Matas in top shape, delivering, helped a little bit by the sun, but is just continuing to deliver really strong growth numbers again this quarter. KICKS, a couple of changes in the quarter. First of all, a hot summer is not great news for KICKS because what happens? KICKS is not a sun care destination, not yet at least. And the Swedes particularly decided to stay on the beach rather than go to shopping malls over the summer. This affected all of retail and, of course, KICKS as well. That is an in-quarter effect. The other one is the ODP, the one digital platform, and I will touch on that in more details later.
Those of you who follow us closely will also remember, as you look at the KICKS numbers, this is the last quarter, and we are very pleased to say that. It is the last quarter where Skin City is in the base in any meaningful way. You have to take that into account. Taking out Skin City, we saw growth in KICKS despite the hot summer and despite the effects of the ODP. What we can also say is that KICKS is gaining share, and that is quite important as we assess the strength of KICKS. For the gross margin, again, some currency effects due to the stronger Swedish krona, buying in Swedish, selling in Norwegian is not great for margins. What we are seeing is the group gross margin is flat.
Matas gross margin is helped both by mix but also by the synergies and by the strength of our in-house brands, including our sun care sales. KICKS margins are down mainly due to FX, but also due to some category and channel shifts. Of course, Skin City, that was a higher gross margin as well. Also of importance, continued cost control. We are in very good control of our costs, and we are continuing to see that the synergies we expected when we announced the acquisition of KICKS, we are getting those synergies. We have also announced that we see additional synergies, and we are well on track to deliver additional synergies in the next financial year. Ahead of the big quarter here, perhaps most importantly, our Matas Logistics Center is fully operational and ready for Q3.
All in all, when we look at the business, we see a rock-solid, stable business with some events that are in quarter, and therefore we feel confident in maintaining our guidance for the financial year, a revenue growth of 3%-7%, around 15% EBITDA margin, CapEx 3%-4% of revenues. I'm noting that the share buyback that we announced is also still ongoing. Deeper into the numbers, and I just covered this, really strong growth in Matas, including our Danish subsidiaries, driven by the effects I just mentioned. Negative growth in KICKS, but taking out Skin City, positive growth and the factors that I alluded to earlier on. What does this say about the execution of the Win the Nordics strategy?
It tells you that even though we are in a transition period for the CEO role, this is a business that is moving forward at full steam. There is no putting on the brakes. There is no vacuum. This is full steam ahead on execution of our strategy and being present in the market. I will pick out a few things of note. I just want to highlight one thing from this overview is that we have brought on board a very senior, very tenured person to lead our Norwegian business and to lead the expansion of our Norwegian business. I think a really good win and a testament to our belief in the Norwegian market.
Looking at highlights, I think the most interesting thing about the business from a commercial point of view is that we are now really seeing the benefits of being one Nordic group when it comes to our offering to consumers. We managed to secure a very attractive brand, Charlotte Tilbury, for launch exclusively in KICKS. This is a brand we've been wanting to bring into the business, both KICKS and Matas. Now as one Nordic group, we are a more attractive partner, and we've been able to launch Charlotte Tilbury to great success. At the same time, we have our in-house brands, and one of the big events in the quarter is the launch of Nølens Jør, a very well-known, fully owned subsidiary of our business, very well-known in Denmark, zero awareness in Sweden, Norway, and Finland. In the quarter, we have launched that brand.
We have put marketing behind it, and we have seen a surprisingly good reception of a brand that nobody knows, thanks to the strength of the brand, but also thanks to the strength of the KICKS organization in introducing new brands to consumers. From a product point of view, and these are just examples, we are seeing that momentum from being a Nordic group that we have hoped for and planned for. We are seeing that in the real world happening. Customers are seeing it, and we're seeing the numbers come back in a good way. Second, and I think this is again and again, what are the most important numbers to follow if you are a long-term investor in Matas, if you are a management, what are the most important numbers to follow?
I think attracting new customers and seeing customer satisfaction and sales per customer go up, these are numbers that we look at very carefully as we judge the performance and the long-term health of the business. DKK 500,000 more transactions in the first half, loyal customers shopping more frequently. That is our plan. Also attracting new customers and in particular, attracting younger customers. We are seeing that reflected in our membership numbers as well, plus 100,000 new members in our club across the Nordics in the quarter, predominantly young people shopping for some of the new brands we have introduced in our stores. We have a small element we call hot on social in the stores, so brands that are trending on TikTok and Instagram and elsewhere, that the customer is able to actually find those in our physical stores and online very fast.
That is a real testament to the health and the strength of the business. Finally, the big thing or the big thing in the quarter is the launch of one digital platform. What does this mean? This means that Matas and KICKS have thus far existed in two different technical environments, two different platforms. We in this quarter aligned those platforms and used the Matas platform that we have been investing in for years and years and years, and adapted that to the Swedish and Norwegian market, following a test before the summer in the Finnish market. This is a very important step for the future. It creates a better customer experience, and we are seeing that straight away in the feedback we get from customers.
It is opening for better business performance when we look at the metrics for conversion or category upsell, all these things, even in-store sales, it enables. It also enables us to do a lot of the things that we want in our strategy, including launching a KICKS app, including building our retail media business on our digital platforms, including integrating more closely with social media. These are all the benefits. From a CFO perspective, one of the wonderful benefits is that every time we invest one krone into the platform, we now get a return on investment in four markets, and we can share best practices completely seamlessly. That is super important. Introducing such a platform comes at a price, a short-term pain, because you can't do this and then fuel sales at the same time.
This is what you see in the quarter, and as you look at the quarter, around 1% effect on total group sales from the introduction of the One Digital Platform. That is the online piece. I think looking at the quarter as well, store openings just continue to surprise us how well-received store openings are in the market. On Friday, last Friday, we opened the biggest Matas ever outside of Odense in Rosengård Center and beat all previous records for sales on the first day of opening a store. We have also opened stores in Norway, in Sweden, and in Finland, in Turku. We saw 700 people lining up in Turku for the opening of the KICKS store in the Hansa shopping mall.
A testament to you as investors, but also to us as management and to our entire organization that the combination of being really strong, fast, attractive online, but also having a well-thought-out, well-planned, well-executed portfolio of stores staffed with great people, that is, in our view, the winning formula. This quarter is a testament to that as well. Finally, repeating what we said in the first quarter, we have lapsed the two big investments, the two biggest investments in infrastructure in the history of the company. KICKS last year, that business and that facility outside of Stockholm is just running really, really smoothly. We have had zero disruptions since we opened that facility. That is a real testament and a real pat on the shoulder to the team running that facility.
We also, as you know, opened our new Matas Logistics Center focusing only on e-commerce sales, and that business as well is running more and more stably, and we are seeing that business also showing efficiency gains as we had hoped for. Two facilities that we needed to have in place for our long-term growth are now in place, well ahead of the Christmas quarter. Market, and this is a question we get a lot, what do you see in the market? I would say that overall, we really see the same situation that we saw in the previous quarter and the quarter before, namely in Denmark, a consumer that says I'm concerned. Consumer confidence is actually very low in Denmark, but a consumer that continues to shop and continues to shop for beauty and well-being in particular.
No changes to our assessment of the Danish consumer and the Danish market, and no changes to the fact that the consumer still shops and Matas is still growing briskly in that market. In Norway, we said limited impact. It might actually be slightly too negative. We've actually seen good numbers in retail in Norway. We keep a little watch out because KICKS is a high-end position business and therefore a little bit more exposed when consumers are cautious. We are detecting, I think, for overall retail, but also for our business, we are detecting improving conditions in Norway and a strong performance from our Norwegian business. Finland, absolutely no changes. Again, we are not a big player in Finland, so Finland for us is about market penetration, market share gains, less than where the consumer overall is.
Of course, Sweden has been the market that we have paid most attention to because that's where we have seen signs of slowdown in the past couple of quarters. That is still the situation. It's not getting worse. It's not getting better. You have to be really mindful when you look at the numbers of the in-quarter effects that we just discussed and not confuse the ODP or the very hot summer with the Swedish consumer and the sentiment of the Swedish consumer. Really, Sweden unchanged with a very slight sense of might it change in a better direction for the consumer. We are seeing a little uptick in Swedish consumer confidence and some Swedish macro numbers as well. That's something to watch out for, hope for, and perhaps plan for. All right.
With that, I conclude my part, and I will hand over to Per to cover the results in more detail. Yeah. Thank you, Gregers. And I will take you through some more details on our financials for the quarter. Just starting out with the revenues and just actually repeating, Gregers, a very stable quarter with Matas actually growing quite nicely at 6.8% and KICKS growing 1.4% when we exclude the Skin City impact. If you then think about the impact we had from an overall perspective on group, you would actually have seen KICKS more in the range of around 4% had we not had the impact from changing what is needed for the future on our digital platform. If we look at the different channels, really looking at the online business growing plus 12.5% excluding Skin City and stores growing 1.7%.
In that number, just want to highlight the fact that Matas is really growing like for like in stores, 3%, which is a very strong sentiment in terms of the value we have in the stores as we also move forward. Online, again, Matas 16.8% and KICKS, of course, being impacted overall, but our transition into the e-commerce platform. Again, as we said, this is the last quarter where we have Skin City of sizable numbers, and as we move into the second half of the year, it is going to be very limited numbers that we are carrying from the close down of Skin City. Going to the gross margin, and again, here we have some different movements, starting with Matas. Again, our product mix, the assortment, we are driving improved margins. Some of the synergies that we want to realize this year is also improving the margin.
All in all, Matas is really showing the development that we were planning for. KICKS, in line with expectations, though, we are impacted by the FX, it has an impact, and that negative impact, as you'll see, is 0.7% of the margin. Of course, we have, as in previous quarters, been investing in pricing in the market to make sure that we have the right pricing on our products and also making sure that we have the right campaigns, the right initiatives for our consumers. Last but not least, the other segment showing very good improvements and really driven by some of our subsidiaries getting a much better impact in the market. Overall gross margin, if we adjust for the FX impact, basically in line or slightly above last year, which is where we wanted to be.
Moving on to cost, really two factors, but overall, if we look at our staff cost, it's slightly down compared to as a percentage compared to last year. What is really driving that is around our workforce planning, both in stores and online, and slowly, as we become even more efficient on our two logistics centers, that's where we'll see the impact as well. We are streamlining the approach that we have in terms of how do we plan people in our stores and in our logistics centers. Having said that, we are also building the capabilities to drive growth going forward. We talked about pricing excellence. We continue to work on that, and we have actually introduced electronic shelf labels in Norway, and we are seeing the value coming into play of putting that into the way of going to market.
We are also working on our assortment, as we already alluded to, and that continues to pay off, and we have the right people in place. Last but not least, we are also working on AI, and I know there is a lot of talk out there about what AI can do. We are working with that as well. I do not think you should expect big changes in that, but it will over time impact our business and improve our business. A continuous focus on that. Logistics centers, just want to repeat what Gregers said. Very pleased with the development we have had, both from a KLC perspective, but also MLC. We launched it this year, and we are starting to see very good momentum. We have two logistics centers which are really ready for the weeks to come, which we are all very excited on.
On our other external cost, yeah, we are in control of that, and we are seeing some of the efficiencies or synergies coming into place there as well. Though keep in mind that part of our variable cost is really the shipping cost, and when we have a strong e-com business growing, 12% for the quarter, that will also impact our other external cost. Moving in just to summarize, we see a quarter where we basically grow our EBITDA 3.4. If we adjust for the FX impact, we are growing in line with our top line. This is just a summary basically outlining 12% growth on our e-com revenue impact, as Gregers already talked about from the warm summer in Sweden and our change in the e-commerce platform. Gross margin improving, especially in Matas.
We're investing a little bit more in KICKS on the pricing, and then cost basically under control, which leads us to a slight improvement versus last year on our EBITDA percentage compared with an FX adjustment on the cost of goods. Moving into a topic that we always cover, and that is, of course, our inventories. As you'll see in this quarter, which is also impacting our cash flow, as I'll come back to in a minute, it is really that we have had supplies getting ready for the very big season slightly earlier this year again, especially on the KICKS side. That will give us the products we need to have for the high season.
It will ensure that we have the right level of stock in our stores for us to be able to meet the consumers as we move into the very important quarter of Black Week and Christmas sales. Looking at the cash flow, basically comparing that to last year, slightly higher cash flow out for the quarter, which is really driven by the working capital. That is around DKK 100 million, which is the predominant reason for the change. That is, as I already covered, linked into the buildup of inventory, especially in KICKS. That also impacted our gearing level. We are at 3.1, so slightly above our long-term target. This is a quarter where we have built up for the most important quarter of the year, the Black Week and the Christmas.
We are confident once we move into the next quarter that we will get the leverage back into our long-term range. With that, just closing off on our financial guidance, as Gregers already covered earlier, we maintain our guidance for the full year. 3-7% growth underlying, around the 15% EBITDA margin, and we continuously invest in our CapEx as planned, so around DKK 330 million. That basically concludes our presentation. Actually, before we leave it for Q&As, I just want to use this opportunity to thank Gregers. This has been an amazing ride for me for three years. I know this is your 33rd quarter to present, and closing off with another stable quarter and a business that is in really good shape for the future, I just want to say thank you.
I think we should hand over for Q&As. Thank you, Per. Operator, over to you. Thank you. Thank you very much, Gregers. If you do have a question, please press five star on your telephone keypad. To withdraw your question, you may do so by pressing five star again. The first question is from the line of Sebastian Grave from Nordea. Please go ahead. Your line will now be unmuted. Good morning, guys, and thank you for taking my questions. For starter, I'd like to extend my congratulations to you, Gregers. A solid run indeed, and I wish you the best of luck going forward. Also, congrats to you, Per. Look forward to the continued collaboration here. Now, on to the questions.
For starter, I'd like to get my head around the growth profile in the quarter in KICKS, minus 1.4%, currency neutral, and then you allude to in-quarter effects from e-commerce transition, weather, and Skin City. Can you help me get into a number, sort of the underlying growth number? What is the underlying development here, and how does that square with what we've seen in the past quarters in KICKS? So, Sebastian, when we look at KICKS, and also from the report, you will see that we roughly have DKK 20 million of impact from Skin City in the quarter comparison. That is equal to around 2.8%, which basically takes the business from minus 1.4% to a plus 1.4% when we exclude Skin City.
If you then adjust for the ODP, which we have said is roughly 1%, and that is actually pretty much equivalent to the same number one more time, which basically means that we are looking at on the positive side around 4% underlying growth in KICKS if we exclude those two effects. I think that's probably the way you should look at it from a continuation basis and the way we look at the business going forward. Okay. I guess if you look back last quarter, doing the same exercise with KICKS, sort of the underlying growth in KICKS was 8%. Quite steep deterioration in the quarter here. I guess, could you maybe expand a bit on this development? I think the last piece that we did mention, but Per did not mention, is the hot summer. This is one of those things.
We have a different profile for Matas and KICKS. When the sun shines, Matas sells a lot of sun care. It drives traffic to the stores. It does all kinds of good things. It enables cross-selling, all that. In Sweden, in particular, we had an unseasonably hot summer, and this affected all of retail. We did see a dip in KICKS sales, especially in the shopping centers over the summer. This is the kind of lost sales you do not recover. It is not deferred demand or anything. It is just lost sales. With that bit, that is the last piece that I would point to that is an in-quarter effect. What we are doing, which is important, Sebastian, what we are doing is we are expanding the assortment available to KICKS consumers, especially online.
We launched Nølens Jør in the quarter, very important launch across both online and in the stores. This has consumed a lot of attention as well to get that right in a very good way. I would say in KICKS, a hot summer, ODP, Skin City comparisons, that models the picture. What you should really see is a business that continues to drive strategic progress and do all the things that we have listed in our strategy. That's completely fair, and thank you also for clarifying with the summer. Sorry for staying a bit on this topic, because on the flip side, you're also alluding to glimmers of stabilization or improving sentiment in both Norway and Sweden, which was sort of not the case in Q1.
Again, on an underlying basis, I guess, this begs the question about the competitive environment or market shares here in the quarter. Is there any change here? Are you seeing competitors being more aggressive, or what are the dynamics there? No, I would absolutely, and I remarked on the state of how we see the market. That is not reflected in the quarterly numbers. This is a more current sort of assessment of what's going on with the consumer confidence and the most recent signals from the market. Do not take that as an indication that we think in Q2 that the market environment has changed, because it has not. The market environment is soft. It's particularly soft in Sweden. We do see industry numbers that are down. And do remember, those of you who follow us closely, do remember that the KICKS business is much more high-end.
Therefore, the KICKS business is a much more cyclical business. That is just in the nature of KICKS, the way KICKS is today. That is bad news when we have a soft consumer, but it is really good news when we have a more bullish consumer. We just have to take that into account and not jump to conclusions on KICKS based on a market sentiment or a single quarter. That is our message. Our belief in the KICKS platform, the fact that we are seeing more customers coming to the business across the Nordics, 100,000 new members, the underlying development of the business and of the KICKS business is completely unchanged to what we have seen before. You have to take apart the in-quarter effects. Okay. No, that makes sense. I just have a last question. I will jump back to the queue.
I want to touch upon the FX headwinds that you're seeing on the margins. Quite similar pictures we saw in Q1. I understand you highlight the underlying developments to show sort of progress in your profitability. What is the real message here? Is it that we should adjust for this headwind going forward, i.e., you will be able to offset it and on top of that continue to harvest synergies? Are we to expect that given the current balance between SEK and other currencies that we are going to see this headwind persist for the time being? I will comment very briefly. We haven't changed the guidance. That is our assessment of the totality of the quarter and the totality of the business and what we see in the market. I will leave to Per, given that I won't be around for the next quarter.
I'll give it to Per. Yeah, no, and I think just too, as Greg has said, we haven't changed our guidance, and we are seeing a little bit of headwind. I think it's important when we report the numbers that you have a clear sight to what is actually the underlying part of our business and where we are impacted slightly negatively from the exchange rate moving as they are right now. That, of course, also applies if they move in a different direction. I think our task is really to present the numbers so you have a very clear understanding of what's the movement. I don't want to, at least not here, stand and speculate on FX rates for the coming quarters, because if I knew what they were, I should probably do something very differently, and I'm not.
I think we will continue to provide the information for you to assess and evaluate the underlying of our performance in our business. I think maybe one remark that's echoing what we said the last time. We do not consider FX just to be an externality, something that happens to us. We, of course, address FX. We have conversations with our suppliers to make sure that we share the pain and share the gain if FX changes. Do not think of it as something that just happens and then we look at the business. This is, of course, something we react on. We make our mitigation plans. We have conversations with suppliers as well. It is just part of running the business.
We want to be clear, because it's important in assessing the health of the business that this has impacted and give you the information you need to assess the underlying health of the business. Sure. Understand. Great stuff, guys. Thank you so much. Next up, we have Ewe Jo from SEB. Please go ahead. Your line will now be unmuted. Ewe, please go ahead. Your line is unmuted. Let's move on to the next one from Mask. Yes, now we can hear you, Ewe. Please go ahead. Your line is unmuted. Hi, sorry. Thank you for taking my question, Ewe from SEB. Firstly, I just want to say thank you, Gregers, for the collaboration. It's only for a short period with me. All the best to you in the future. I have two questions here.
Firstly, on the market outlook, you have commented on the consumers' confidence. There's no change. Q2 still looks quite good for Denmark. Can you confirm that the trend has continued into Q3? Especially considering some large companies in Denmark have just recently implemented cost-cutting. Secondly, a question to Per. You have expanded the inventory build-up for the upcoming season. You also commented on the high inventory was due to the wider product assortments. I was wondering if this is also a structure change in the business. If yes, could you remind us if you have any soft guidance on the working capital to the sales ratio? All right. I would say it would be breaking with 33 quarters of tradition if we were to comment on current trading. I'm not going to do that.
I think the main takeaway for the market outlook is that we do not really see material changes in our assessment of where the consumer and the market is. We might see glimmers of hope or glimmers of concern. You can judge that. As a basis for evaluating the future, we kind of say this is most likely unchanged. That is what lies beneath our guidance for the full financial year. In terms of inventories, yes, as you will see, we have had an increasing inventory in this quarter, really partly due to timing of all the products for the high season. The other thing, of course, is also the assortment expansion.
I think actually more importantly is that over the last two years, what we've been through from a KLC perspective, setting up a totally new supply setup, logistics center in Sweden, improving the way that we are able to ensure the availability in stores for our KICKS business. In this year, launching the MLC, the new logistics center in Matas. For us, it's very important that as we go through those phases of those new logistics centers, the new setups, that we have sufficient products in store to manage any small variation, whatever that might be. Thank God we haven't seen any major impacts on our setups. Really to make sure that we have sufficient inventories as we move into these periods. As you can see, this is the first period for MLC, for the new logistics center for Matas.
This is the first high season. Of course, we are a little bit more cautious on our inventories to make sure that we have sufficient inventories. As we become in the future even more familiar and even more efficient in the way we operate our logistics centers, that will, of course, also impact our inventories. It was very clear. Thank you so much. I will jump back to the queue. Let's move on with Mask Fiskar from DNB, Karnakey. Please go ahead. Your line will now be unmuted. Thank you for that. I will take my questions one by one. You mentioned the summer effect. I wanted to focus on your online business in KICKS instead. We are adjusting for Skin City, for FX, for the online migration. There seems still to be a small quarterly sequential decline in the growth momentum.
Is that something to be nervous about? I would not read anything into that, Mass. I think the numbers, when you do the absolute numbers, they are quite tiny. I would not read anything into that. I think you have all the pieces of the puzzle, and then you can do your math and figure out what is sort of the underlying growth. I would not jump to any sort of conclusion as to is this a change in the overall growth trend. Remember, big picture, what we are doing with KICKS is adding more assortment to our online business, very rapidly, actually. We have built an automated warehouse to enable faster delivery, one of those things that consumers really appreciate and that has been very important for the Matas digital journey.
We are investing behind our digital business to widen the appeal of KICKS to new consumers, but also help existing consumers buy more different categories. This is a long-term strategy. It will take time to change the perception of KICKS, both for existing members and for new customers. We are seeing proof quarter over quarter over quarter, right from the beginning, that this really appeals to KICKS members. Just the fact that they can now buy their haircare with KICKS instead of going elsewhere means a great deal to consumers, but they just have to discover. All the consumers have to discover. All the members have to discover that KICKS online now has a bigger offering. I would not jump to any conclusions based on one quarter.
I would look at strategic progress quarter over quarter and look at what we're actually doing to strengthen KICKS's online business. This is, of course, what lies behind our confidence in the long-term ambitions, that we have a strategy that has proven its worth in Matas for years and years, but has also proven its worth for the last two years in KICKS. Remember, we have been growing faster than the market in KICKS since the day we got the keys. I think that is quite an achievement from our colleagues in KICKS and from our group supporting KICKS that even while doing integration, taking out synergies, doing all the hard work of becoming one company, KICKS has continued to perform in the market and gain market share. No changes to the assessment that we are on the right track with KICKS for the long term.
Makes sense. Thank you for that, Gregers. Then maybe a question on high-end beauty in KICKS, which is down year over year. Do you think that is a sign of downtrending, or do you think this is more like a timing question, people holding back for the upcoming Black Week? Yeah. That's a very good question, Mass. We ask ourselves that. Sometimes it's timing of campaigns. Sometimes it's having had a big launch last year. Sometimes it's a trend on TikTok last year that was not this year. All these factors go into the mix. As I said before, of course, high-end is more exposed to cyclicality, to cyclical consumers. That's just in the nature of the KICKS business. No surprise to us that KICKS is a little bit more up and down and a little bit less steady as she goes.
It goes both ways. When consumers are down, this affects KICKS slightly more. When consumers are exuberant again, then KICKS feels the benefit very fast. I think it just, I would say, this is a quarter that, for better or for worse, confirms our strategy. It confirms the nature of our two businesses. It confirms where we are on our strategic journey. We have some pieces in the puzzle, some in-quarter pieces of the puzzle that you can pick apart and make your own assessments. Great. Maybe a question on competition, especially in Sweden. I saw that Lyko, one of the main competitors, was out saying that they wanted to accelerate their physical store rollout beginning from next year. I think they mentioned plus 100 stores in the coming years. Pretty aggressive. How do you plan to navigate reactions from competitors like that?
I think if I were an investor in Matas Group and KICKS, I would say, is this a great vote of confidence in the future of physical retail? Without commenting specifically on any named competitors, I think what we have seen, and what we have seen not just in the Nordics, but across the globe, is that consumers, for beauty, for well-being, they enjoy going to physical stores that are in the right location, with the right concept, with the right people. I would say a big vote of confidence in the future of the stores and a big vote of confidence in what we have proven over the last eight years, that the combination of strong e-com and strong store presence, that is the winning model, because that's what consumers want. Great.
On a final note, Gregers, I also wanted to thank you for the collaboration over the years. I wish you all the best for the future. I think you can be extremely proud of your achievements in Matas in 2017. From my side to share, you have done a fantastic job. Thank you so much and all the best. Thank you very much. Next up, we have Paul Jessner from Danske Bank. Please go ahead. Your line will now be unmuted. Yes, thank you. I can stand up in the queue and congratulate you and also say that you can be very proud of what you leave behind you. Question number one, just on the personnel. It's going down year over year by 5% and sales is up 7% of the current.
Can you say something about when we should expect the number or the personal cost to level out so that it's only led by increases in salary? Yeah, that's question number one. I think what we can comment on is, of course, where we are today. What you see in the salary cost is, of course, part of the synergies when we put the two organizations together. It's also a reflection of, even though it's early reflection, but it's also a reflection of the change of our logistics center in Denmark moving from a fully manual setup into an automation in the Matas Logistics Center. That's the impacts what you're seeing. As we move forward, we will continue to focus on the right elements in terms of getting more efficiency out of our logistics centers. Okay. Thanks.
As most of that question has been answered on the operating level, I have a more overall one on AI and especially AI agents. We saw that Amazon is showing Perplexity to stop using their automated agents to go shopping on the Amazon platform because the reason is that Amazon is losing control of the advertising and so on. The question is, how do you expect AI agents in the future to impact the online business? You have quite a big one. That is a very, very good question, Paul. It is a very, very big question. Fortunately, it is a question and a theme that has very little real-world impact right now. Of course, we are discussing that.
From a mindset point of view, as a business, I think what has been a big driver of the success of our group over the last eight years is that whenever we see a new technological development, we do not think of it as a threat. We think of it as something we can leverage to run our business better, to serve customers better, to be more efficient in daily operations. That is exactly the mindset that we have around AI. We think AI will bring a ton of benefits to the business. Will there also be threats from agentic AI buying agents that behave differently from real people? Maybe, perhaps.
I think overall, what we have seen time and time again, if you are the market leader, if you have a direct relationship to the end consumer, and the end consumer loves shopping with your platforms, if you have all that data and you bring in the technological capabilities, then you are in a good place. You are in a good starting point. I will not be stepping out saying, "You have an easy job, Pierre, to fix around AI." It will be a massive theme for all of retail, I think, for all businesses. It is our mindset to turn that into an advantage. We have building blocks that nobody else has. We have been surprised. You remember, Paul, when we started out in 2017, everybody thought that e-commerce was going to eat away physical stores.
That was like the it was almost like a truth. It turned out very differently. It turned out that e-commerce has actually strengthened the appetite of the consumers for physical stores. And companies such as ours that has both online and physical stores have actually been able to gain share systematically and sustainably. Okay. That was actually all from my side. As there are no further questions from the conference call, I will hand it back to the speakers for any closing remarks. Thank you very much, Operator. And thanks for joining. I think this is a quarter that tells you a couple of stories. It tells you a story about a robust business, even when the world is changing and uncertain. It also tells you a story that we are not afraid to make moves and push the business forward and execute on our strategy.
I think one of the things that I am particularly proud of, if I may, is the fact that Matas has an enormously strong leadership team. The fact that the board has the opportunity to appoint Pierre to run the show, I think is one of those things that really I will remember and take away as one of the great achievements, having built a strong team for Matas. Thank you. Thanks for joining for this event. Thanks for the collaboration. For those of you, I will not be meeting again.
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