Earnings call transcript: Nagdardi Group sees modest growth in Q3 2025

Nagdardi Group reported a 1.6% increase in sales revenue for the third quarter of 2025, with online sales growing by nearly 8% compared to the previous year. The company confirmed its guidance for 2025, expecting an operating margin increase to 2%. The stock price of Groupe FNAC, a related entity, currently trading at $33.59, saw a slight decline of 1.06% after the announcement. According to InvestingPro data, the company maintains a "FAIR" financial health rating with a solid overall score of 2.26 out of 3.

Key Takeaways

• Q3 2025 sales revenue increased by 1.6% on a like-for-like basis.
• Online sales now account for 20% of total revenue, with an 8% growth.
• Operating margin expected to rise to 2% in 2025.
• Strong performance in games, toys, and stationery categories.

Company Performance

Nagdardi Group’s Q3 2025 performance showed modest growth, with a 1.6% increase in sales revenue. The company’s online sales have become a significant part of its business, now constituting 20% of total group revenue. The launch of new products, such as the Switch two console and innovations in beauty tech, have contributed to this growth. The company continues to expand its market presence in Portugal and other European regions.

Financial Highlights

• Revenue: Up 1.6% year-over-year for Q3 2025.
• Gross margin: Improved by 50 basis points.
• Online sales: Grew by nearly 8% compared to September 2024.

Outlook & Guidance

Nagdardi Group has confirmed its guidance for 2025, anticipating an operating margin increase of 15 basis points. The company remains confident in its Q4 2025 performance due to expected peak sales periods. Strategic initiatives include a continued focus on services, online sales, and consumer electronics.

Executive Commentary

Jean Pierre Loutinier, CFO, stated, "We are performing really well, driven by services activities, online sales, and the consumer electronics renewal cycle." He also expressed confidence in the company’s ability to capitalize on major commercial events at the end of the year.

Risks and Challenges

• Consumer electronics market volatility.
• Household confidence is declining, affecting spending.
• High savings rate in France could impact consumer spending.
• Continued consumer constraints in the market.

Nagdardi Group’s performance in Q3 2025 reflects its strategic focus on innovation and online sales, positioning the company for continued growth despite market challenges.

Full transcript - Fnac Darty SA (FNAC) Q3 2025:

Jean Pierre Loutinier, CFO, Nagdardi Group: Good evening. Welcome to this conference call presenting the Q3 performance of Nagdardi. Without further ado, handing over to Jean Pierre Loutinier, CFO of the Group. Thank you. Good evening, everyone.

Thank you for joining our conference call to discuss our results for Q3 and the first September 2025. This evening, I am joined by our Investor Relations team, Dominique Vielle and Laura Parezo. I will begin by presenting our results, and then we will take your questions. I would like to remind you that we are commenting on like for like figures. In other words, excluding changes in scope, store openings and closures and, of course, including UniEuro and after the deconsolidation of the ticketing business.

Slide three shows the key figures for the first nine months of 2025, which I will detail throughout this presentation. Our sales revenue is up 1.6 on a like for like basis for the quarter, bringing the performance at the September to plus 1%. This strong performance is mainly due to a return to growth in hardware during the back to school period, solid growth in online sales and, of course, continued strong momentum in our Services segment. Our gross margin improved over the first nine months of the year, up 50 basis points. Finally, given these strong results, we confirm our guidance for EBITDA margin growth as communicated in our twenty twenty five half year results.

Let’s move on to Slide four. I will now comment in detail on the growth of 1.6% for the quarter and plus 1% for the first nine months of the year. By category, the trends are broadly similar across all our geographic areas. Services continue to grow and are showing solid growth in most of geographies, driven by the development of our subscription offers and, in particular, the rollout of Dossi Max and Fnac Vigil Digital. Diversification also continues to perform well with double digit growth in games, toys and stationery.

Home appliances are up compared to the September 2024. Small appliances continue to grow, supported by innovations, particularly in beauty tech and floor care. Sales of large appliances are down slightly despite the positive impact of sales of air conditioning and cooling products. Consumer electronics declined despite a strong recovery in hardware sales in the third quarter during the back to school season, and this recovery suggests that the renewal cycle will continue in the coming quarters. Tablets and photography showed very strong growth momentum.

Telephony, on the other hand, declined over the period despite several successful launches in Q3. Meanwhile, refurbished phones confirmed their momentum with strong growth. Television was impacted by a high 2024 comparison base linked to the European Soccer Championship. In addition, we successfully launched the computer components category in August, strengthening our position as a specialist retailer in the gaming world. Lastly, Publishing Products benefited from the excellent launch of the Switch two console in June.

To date, more than 100,000 units have been sold in our stores. Book sales declined over the period due to a sluggish market. By channel, our online sales grew strongly with a nine month increase of nearly 8% compared to the September 2024, and they accounted for 20% of group revenue over the period. Click and Collect is a key indicator of our omnichannel performance, and it accounted for nearly 50% of our online sales at the September. Finally, our like for like gross margin at the September, meaning including Uni euro and excluding ticketing, was up 50 basis points.

And this strong performance is mainly due to the growth in the Services segment, particularly Darty Max, which offset the dilutive effect of the franchise and the negative impact of the product mix. Now let’s take a closer look at the group’s performance by geography on Slide five. The France region posted like for like sales growth of plus 0.9% at the September, including 1.7% in Q3 alone, driven in particular by strong online sales. According to data published yesterday morning by the Banque de France, Snack Dirty continued to outperform the market by more than two points at the September. Furthermore, the scope effect for the period corresponds to the permanent closure of the Champs Elysees store.

Let’s now move on to the rest of the world or rather Rest of Europe region, which posted like for like sales growth of 1% at the September, including 1.3% in Q3 alone with contrasting trends across countries. In Italy, like for like sales were virtually stable at minus 0.6% at the September. The third quarter was impacted by high basis of comparison as Italy experienced a heat wave in 2024. Italy’s performance moved over the last two years is similar to that observed in France over the same period. Strong growth in online sales and services did not offset the decline in sales of household appliances, telephony and television.

Belgium and Luxembourg posted sales growth of plus 0.9% like for like at the September, thanks to strong growth in Q3. Portugal posted like for like growth of plus 6.5% at the September, including plus 10% in the third quarter alone, driven by solid performance from our two brands, Snack and Dirty. Spain posted very solid like for like growth of plus 6.2% at the September with plus 3.9% in Q3 alone. All categories are up with services posting double digit growth. The scope effect reflects, in particular, the temporary closures of the Callao and Valencia Bonheir stores for renovation.

Finally, in Switzerland, like for like sales at the September were up 3.6%, including 7.1% in the third quarter, driven by double digit growth in services. Let’s now move on to the rollout of our strategic plan with a few examples of operational initiatives that have been implemented. On Slide six, a word about the launch of the Dorthy brand in Portugal. In early October, the group launched the Dorthy brand in Portugal, marking the beginning of a new phase in the distribution of consumer electronics and household appliances in the country. This launch comes with an ambitious expansion plan aimed at opening more than 30 stores by 2030 as part of Beyond Everyday.

This momentum demonstrates the group’s strong commitment and the significant potential of the Portuguese market. Slide seven. In line with the first pillar of our strategic plan beyond repair, in which I would remind you, our ambition is to become the benchmark player in high value added products and to accelerate the rollout of subscription services for the home with circularity as the central focus. In early October, the group published the eighth edition of its after sales service, Barometer. It’s a benchmark tool both for industry and consumers.

Please click on the link at the bottom of the page to find out more about this barometer. And this new edition reveals for the first time these symptoms of breakdowns across 100 product categories, thanks to the analysis of over 1,000,000 breakdowns reported by our customers and Dirty Max subscribers. And very soon, the group will launch a range of services and advice for manufacturers, giving them access to the durability data consolidated by the group over nearly twenty years and already used to select the products offered in snack dirty stores. In addition, we have also broken ground on a new 6,500 square meter customer care and logistics platform in Chile Mazarin, which is now the largest site in France for the delivery of bulky products such as televisions and large household appliances. And this opening is fully in line with Beyond Everyday, our new strategic plan, notably by improving the customer experience, supporting the growth of DortiMax subscriptions and increasingly integrating the circular economy into our processes.

Slide eight, in line with the second pillar of our strategic plan beyond digitized omnichannel or how the group aims to set market standards for customer experience across all touch points. And the opening of a new integrated Dardi store in Rouen in the Dock 76 shopping center allows us to test a new store concept with a view to future renovations. The store’s signage has been completely redesigned to create a much warmer and more modern atmosphere, as you can see. And from now on, the different sections are no longer organized by product type, large or small appliances, for example, but by room in the house, a laundry room, kitchen, wellness, etcetera. Each area is identified with decision making aids to guide customers through their shopping experience.

So we have a new blue and green signage, which illustrates our desire to further integrate the circular economy into our future points of sale. As of snack, the group has reopened the Vision store in a new shopping center in the city center. It has modernized furniture, redesigned signage, themed areas and self-service checkouts. Everything has been designed to test new ideas and improve the customer experience. Finally, SNAG has also launched Body and Tech.

It’s a concept based on three fundamental pillars: sports, smart health and beauty tech. It’s a space entirely dedicated to this new generation of innovative technological products dedicated to wellness and well-being, which has been created on our website, snack.com, and for the moment, in two of our Parisian stores, La Defense and Forum des Ales. This test and learn approach perfectly embodies the beyond everyday spirit, innovating, listening and progressing together. Slide nine. Here, we’re outlining the third pillar of our plan beyond retail, which consists of deploying the group’s expertise to partners and across all geographic areas.

The group is consolidating its position as a key player in the cultural ecosystem. It’s building on its role as a trendsetter and talent scout. SNAK supports culture through various awards, including the SNAK Novel Prize and the Grand Cruel de Lisinon Prize for Literature and the SNAT Francentiere Comic Book Prize for Artistic Creation. We’re also accelerating the rollout of WAVEN, a company created with CEVA Logistics. Since the launch in October 2024, Waveven, the group’s affiliate dedicated to marketplace operations, has seen its business grow significantly in terms of both the number of partner sellers and orders shipped.

The latter has quadrupled this year with two thirds of them coming from marketplaces outside the group. In addition, since September, Click and Collect delivery has been available in snack stores for third party sellers. Weaven’s business is now up and running with an extremely encouraging trend to date. Finally, we are continuing to ramp up our omnichannel retail media business. Our internal retail media agency, Retail Link, has become the first non food agency to obtain CESP eRetail Data Trust Certification.

Designed to ensure transparency, reliability and performance of digital advertising campaign reports, this certification positions Retail Link as a key player in a fast growing and evolving sector. To conclude, on Slide 10. In the context of continued consumer constraints with household confidence down and the savings rate at historic highs in France, we are performing really well, driven by services activities, online sales and the consumer electronics renewal cycle that is beginning to materialize. And despite these macroeconomic uncertainties, we are confirming our guidance for 2025 and expect our operating margin to increase by 15 bps. It should reach 2% at the 2025 compared with 1.8% in 2024 on a like for like basis.

This slide shows the details of the dilutive impacts related to the integration of UniEuro, whose operating margin was lower than ours and the deconsolidation of the ticketing business. As you know, Q4 is very important for the business because it is driven by the peak sales periods in which the group does really well, and we are confident that consumers will be there. We are ready and confident that we will make those major commercial events at the end of this year a real success. We’re now available to answer your questions. Thank you very much.

UNIDENTIFIED REPRESENTATIVE:] one, the renewal cycle for IT, in particular, with the switch to Windows one. Are you expecting renewed interest for users? And is this already reflected in Q3? Or do we need to wait until the end of the month at the end of the year? Now regarding the new store opening in Portugal, what about the phasing?

Have you already secured stores? Can we have some idea if you could please give us some color? Certainly, we’ve read in the press that you might be interested in Groom. Do have any comments on that? Now since the back to school period, we’ve seen the IoT renewal cycle materialize.

That’s something that we expected, and it’s happening clearly. So Windows 11 is on its way. I mean there are updates that have been prolonged, extended, but that won’t last forever. Regarding Dirty Protocol, we will be opening new stores on a regular basis as early as next year. We will move as quickly as we can depending on whatever opportunities arise on the market.

Are you saying that you’ve already secured a number of existing stores? It doesn’t take very long to find locations. We’ve already secured a number of stores. We’ll see how quickly we can open them, but early results are very promising. Now as far as your last question is concerned, I believe everybody knows that this company is up for sale, and it’s being sold by ENGIE.

It’s a company that does home installations, repairs, subscriptions. So obviously, these are things that we love and that everybody can relate to, but it’s too early to give you information on that. There are lots of funds that are interested. They may have a different vision of things, but they have deep pockets. So we’re not going to give you any more comments than that.

Any other questions, please press

Unidentified Representative, Analyst: we have no further questions. Well, that’s great. Thank you all very much, and have a very pleasant evening.

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