Earnings call transcript: Nelly Group Q2 2025 sees strong stock surge

Nelly Group AB reported a robust financial performance for the second quarter of 2025, marked by a significant increase in net revenue and operating profit. The company’s stock surged by 25.47% following the earnings announcement, reflecting investor optimism about its growth trajectory and strategic initiatives. According to InvestingPro, the company has demonstrated impressive momentum with an 86.61% return over the past year and maintains a strong gross profit margin of 53.59%. The company achieved record-high operating profit and margin, despite a slight decline in gross margin.

Key Takeaways

• Nelly Group’s net revenue increased by 15.1% year-over-year.
• The operating profit reached NOK 55.4 million, up from NOK 30.5 million last year.
• The stock price rose by 25.47% following the earnings release.
• The company plans to expand its flagship store concept to Copenhagen.
• Nelly Group recorded a positive operating cash flow of NOK 104.1 million.

Company Performance

Nelly Group demonstrated strong financial performance in the second quarter of 2025, with net revenue climbing to NOK 361.7 million, a 15.1% increase from the previous year. This growth was supported by a robust operating profit of NOK 55.4 million, representing a significant improvement from NOK 30.5 million in the same quarter last year. The company’s operating margin also improved to 15.3%, up from 9.7% previously. Despite a slight dip in gross margin, the company managed to maintain strong cost controls, contributing to its overall profitability.

Financial Highlights

• Net Revenue: NOK 361.7 million (+15.1% YoY)
• Operating Profit: NOK 55.4 million (vs. NOK 30.5 million last year)
• Operating Margin: 15.3% (vs. 9.7% last year)
• Gross Margin: 54.5% (down from 54.7%)
• Positive Operating Cash Flow: NOK 104.1 million

Market Reaction

Following the earnings announcement, Nelly Group’s stock price jumped by 25.47%, closing at NOK 56.90. This surge places the stock near its 52-week high of NOK 59.4, reflecting strong investor confidence in the company’s future prospects. InvestingPro analysis suggests the stock is currently trading above its Fair Value, with a P/E ratio of 16.68. The market’s positive reaction can be attributed to the company’s impressive financial performance and strategic initiatives aimed at expanding its market presence. Discover more insights about Nelly Group’s valuation and 8 additional ProTips with an InvestingPro subscription.

Outlook & Guidance

Looking forward, Nelly Group is focused on expanding its category leadership and investing in social channels. The company plans to launch new international brand collaborations and expand its flagship store concept to Copenhagen. Nelly Group remains committed to optimizing its return rate and maintaining strong cost control measures.

Executive Commentary

CEO Helena Carlin der Ostland expressed satisfaction with the company’s performance, stating, "We have delivered a strong result with both accelerated net revenue growth and increased profitability." She highlighted the company’s efforts in growing its customer base, noting, "We are growing our customer base through both new customers and more customers who enjoy their experience."

Risks and Challenges

• Volatile market conditions could impact future revenue growth.
• Consumer sentiment remains challenging, potentially affecting sales.
• The company faces competitive pressures in expanding its market share.
• Macroeconomic factors such as exchange rate fluctuations could affect profitability.
• Supply chain disruptions may pose risks to inventory management.

Q&A

During the earnings call, analysts inquired about Nelly Group’s return rate strategy and marketing spend approach. The company emphasized its focus on profitability-driven marketing and detailed its plans for category expansion, highlighting the importance of effective inventory management in sustaining growth.

Full transcript - Nelly Group AB (NELLY) Q2 2025:

Moderator, Nelly Group: Welcome to Nelly Group Second Quarter Report 2025. Today I am pleased to present CEO Helena Carlin der Ostland and CFO Nicholas Linglam. After the presentation, there will be a question and answer session. Participants are able to ask questions in written form on the audiocast page. Now I will hand over to Helena Karlander Ostland.

Please go ahead.

Helena Carlin der Ostland, CEO, Nelly Group: Thank you very much, and a very warm welcome to the second quarter results call for Nelly Group. My name is Heliana Kalindr Esplund, and I’m the CEO of Nelly Group. And I’m hosting today’s call together with my colleague, Niklas Lindblum, who is our CFO here at Nelly Group. Today’s call will be divided into four parts. We will start with a short video to introduce Nelly.

Before I will then provide some comments on the second quarter of twenty twenty five, I will then hand over to Niklas, who will provide us with a financial summary of the quarter. And we will, as always, conclude today’s call with questions and answers. So please send us your questions throughout today’s presentation. You can send them all the way to the end of the presentation. However, of course, we do appreciate if you can send them to us as early as possible in the call to make sure that we can see all your questions and answer them at the end of the call.

So without further ado, let’s start with a short video to introduce Nelly. So let’s move on to have a look at the second quarter of twenty twenty five. We are very pleased to report that we have delivered another strong quarter. And I think this must also be seen in light of a relatively challenging market, which was quite volatile during this period. So we saw that April was April and May in particular were a little bit challenging.

June was stronger, but taken together, it was quite a challenging and volatile market. So I think our performance during that period really is a clear sign that our spring and summer assortments was strong and also that the Nelly brand continues to gain both lasting and resilient traction across our core markets. So a strong quarter in the context of a challenging market. Now let’s look at some of the specifics. The second quarter is an important quarter for us where our customers have many important reasons to shop, both a number of celebratory occasions such as graduations and the like, but also, of course, everyday occasions, such as preparations for for summer holidays and so on.

So it is a very important quarter for us, and it’s pleasing that we succeeded in both accelerating growth and improving profitability compared to last year. So net revenue grew by 15.1%, which can be compared to growth of 8.8% in the same period last year. And net revenue landed on DKK 3 and 61,700,000.0 for the quarter. Operating margin increased to 15.3%, which can be compared to 9.7% in the same period last year And we generated an operating profit of DKK55.4 million as compared to DKK30.5 million in the same quarter last year. So I think this is a really strong result and it highlights the potential of the Nelly business with a clear and strong year on year improvement.

Most pleasing, the second quarter also marked our third consecutive quarter with active customer growth in our core markets. So the number of active customers grew for the third quarter in a row. And we really see that this was driven by two elements. Firstly, we continue to effectively recruit new customers. And this is both through the changes we have made in our paid advertising and and how we allocate our paid spend, but also importantly, organically through continuously building the Nelly brand in everything we do.

So during the second quarter, we we continue to see strong new customer recruitment. And alongside this, we also improved our repurchase rates among existing customers. So more of our existing customers returned enjoyed their experience previously with with Nelly and returned to make another purchase. And I really do think this is testament to both our strong assortment and the end to end customer experience that we have created. So growth in our active customer base is a very important KPI for us going forward as it absolutely is the foundation for growth going forward.

So something we will be watching very closely, of course, in the coming quarters as well. Then let’s move on. We also saw during the second quarter that our own brand continues to deliver. So our own brand share grew to 54.8 as compared to 43.8%. And this growth in the Nelly brand could be seen actually across almost all product categories.

A few though are worth mentioning in particular. So we further strengthened our already strong position in jeans, where we saw significant year on year growth in sales during the second quarter. And in addition to that, we also the Nelly brand also performed very well on tops, dresses, and knits in particular. And, of course, knitwear is an important and and interesting category for us here. It is a smaller category in the second quarter, but the the results of the performance we saw in knitwear during the second quarter really is a very encouraging sign ahead of the autumn and winter season when knitwear takes a considerably larger share of sales.

So encouraging signs there. And, of course, our own Nelly brand is also absolutely core in our flagship store in Stockholm. So around 80% of our sales in Stockholm come from our own Nelly brand. And as we now take our flagship store concept to to Denmark with a flagship store in Copenhagen later this year. Our own Nelly brand will, of course, have an absolutely central position there as well.

Moving on to have a look at our return rates. So our return rate is always in focus. And here, we continue to deliver a low return rate during the second quarter of twenty eight point four percent as compared to 31.3% in the same period last year. And this is the result of the continued implementation of our cross functional return strategy. So just to highlight a few of the elements that we work with there, we continue to work very proactively with the both the design and the choice of fabric for our garments to make sure we we both achieve that perfect fit, but also that fit that will actually work for for for many different customers.

We also continue to improve the type of customer information that we provide, so the type of product information rather that we provide to our customers and how we do that. And we also continue to work with our system IT systems enablement to to manage our returns in the best possible way. It’s important, again, to highlight here that easy and fuss free returns are a very important service to our customers. So we have to make sure that our customers can, of course, in a very easy way, return products if they don’t quite fit. But all of our work on on reducing our return rate is focused on eliminating what we call unnecessary returns.

So returns that could have been prevented through, for example, clearer or better or more information about the products to the customer. So very, very focused on eliminating unnecessary returns. And this has resulted in this low return rate. Also worth mentioning here is that in addition to our cross functional strategy during the second quarter, we also were able to, in a much more efficient way, replenish styles that had shown early signs of success. So we have made some changes there as well in the way in our in our ways of working, essentially, to make sure that we can very early on tell which styles will will be successful and will have a a good return rates and and then replenish those, which, of course, also then has a positive effect on the overall return rates.

Now moving on to have a look at our gross margin during the second quarter. So we delivered a solid gross margin of 54.5% in the second quarter despite price pressures in the markets and also some cost pressures, which I will come back to in a minute. Now the gross margin was, of course, positively impacted by the growth in our own brand share. However, if you have followed Nelly for some time, you will notice that the link we have historically seen between growth in our own brand share and an increase in our gross margin was not quite as pronounced in the second quarter as we have seen historically. We, as I said, we achieved a gross margin of 54.5%, which can be compared to 54.7% in the same period last year.

And the the reason why this link was not as pronounced in the second quarter was because we did actually take a very conscious decision to maintain attractive and dynamic pricing towards our customers despite a number of of sort of cost pressures. So we had higher production cost, especially among the styles that are produced in Turkey. And we also made a number improvements in the quality in some of our best sellers, which, of course, impacted production cost. So despite this, we we decided to maintain up our key price points on some of our best sellers towards our customers given that the market was a little bit more challenging during the second quarter. Now it’s also worth mentioning that there were some both calendar effects around Easter and our mid season sale, which also meant that more of Easter and more of our mid season sales fell into the second quarter rather than the first quarter, but the impact of this was relatively seen smaller than of our decision to maintain pricing.

Nevertheless, a solid gross margin in the second quarter once again. Now let’s move on to have a look at our marketing activities during the second quarter. So we can conclude that our marketing activities during the second quarter were both efficient and impactful and represented a significant investment in building the Nelly brand long term. So our marketing costs as a proportion of net revenue decreased to 10% as compared to 13% in the same period last year. Our online traffic in our core markets grew by 8.5%, and the number of orders increased by 14.3%.

And importantly, if we look at our paid advertising, we could also conclude that profitability per order grew once again compared to last year. So really a solid solid results from our marketing spend. It’s also worth highlighting here again that we further increased our focus on our social channels, so Instagram and TikTok in particular, alongside also starting investment in some new channels. And this was our focus on our social channels was both in terms of paid and also organic. And the reason why we continue to increase our focus on these social channels is because we have seen that they do tend to build deeper relationships with our customers and also more solid loyalty long term to the Nelly brand.

So important, of course, that we we build the Nelly brand in a sustainable way, and and that is best done through our social channels. So let’s have a little look ahead as well. And there are some really exciting times ahead. So as I was talking about just a minute ago, we have seen really strong growth in many categories in the second quarter, both in our own Nelly brand, but also in our external brands. But we do believe we have yet more potential to capture there, both in terms of establishing an even stronger position in some of the categories where we have already performed incredibly well, but also in further categories where we have not yet made as much inroads as we have in in, for example, jeans and tops.

There are additional categories where we see significant potential going forward. And this again is both in terms of our own Nelly brands, but also our external brands, which of course are absolutely critical and go hand in hand. And establishing leading positions in all of our key categories will, of course, enable us to also expand the average basket size going forward. So we are very proud and pleased of of the inroads we’ve made on many categories already, but there is more work to do there on further categories. Going forward over the coming quarters, we also have several new brand launches already planned with well known international brands that we are really, really pleased to be initiating collaborations with.

And we are also in further discussions with brands to hopefully launch them a little bit more longer term. So I I think we have we have a very strong external brand portfolio already, which will become even stronger with these brands added. So very exciting for us. And, of course, last but not least, as I mentioned a little bit earlier, we did announce at the end of the second quarter that we are expanding our flagship store concept, which has been very successful for us in Stockholm to Copenhagen, to Stroggit, to be precise, which is Copenhagen’s busiest shopping street. And there, we will be opening a new flagship store in this very beautiful old building that we see in the picture here later in the year.

So to summarize the second quarter, we have delivered a strong result with both accelerated net revenue growth and increased profitability compared to last year. Importantly, we are also winning more customers. We are growing our customer base through both new customers and more customers who enjoy their experience and are returning, which is very pleasing. And we see significantly more potential ahead of us. So our focus over the coming quarters will, of course, be on capturing even more of the potential that we see in Nelly.

So with that, I will hand over to Nicolas, who will provide us with a financial summary of the second quarter.

Nicholas Linglam, CFO, Nelly Group: Thank you, Elena. And now let me give you a closer look at the financials for the second quarter. Net revenue in the quarter amounted to NOK 361,700,000.0 compared to NOK 314,100,000.0 last year, showing a strong growth rate of 15.1%. Main driver for net revenue growth was a combination of increased online sales before turns, improved return rates, and increased store sales. The return rate decreased to 28.4% in the quarter, down from 31.3%.

Currency effects affected the growth rate negatively, mainly due to the depreciation of the Norwegian krone. Net revenue in local currencies grew by 18.2%. And total number of orders in The Nordics increased by 14.3%. Average order value decreased by 6.8%, which was driven by both lower average item value and lower average ordered items. Moving on to next slide.

We conclude that operating profit in the second quarter amounted to million compared to EUR30.5 million last year. Operating margin increased to 15.3% compared to 9.7% same quarter last year. So the second quarter showing record high levels for both operating profit and operating margin. Improved operating profit was mainly driven by higher gross profit through increased net revenue and maintained high level of cost control. Let’s also have a look at LTM figures on the next slide.

Nelly is showing strong financials on LTM figures with an operating profit of 136,600,000.0 and an operating margin of 11.7%, Increasing both operating profit and operating margin further, Nelly has over a sustained period of time performed both net revenue growth and continuously improved our profitability, showcasing good momentum and cost control. And now let’s take a quick look at the income statement on the next slide. So once more, net revenue amounted to 361,700,000.0 compared to NOK 314,100,000.0. Gross profit amounted to EUR 196,900,000.0 compared to EUR 171,000,000, with a gross margin of 54.5% compared to 54.7% last year. Warehousing and distribution costs amounted to SEK42.7 million compared to SEK42.1 million.

Costs as a share of net revenue improved to 11.8% from 13.4% last year. This was mainly driven by operational improvements, optimization of distribution and improved return rates. Marketing costs amounted to 36,200,000.0 compared to SEK 40,900,000.0 with costs mainly related to paid advertising. Marketing costs relative to net revenue decreased to 10% from 13% last year. And administration and other operating expenses increased to 62,600,000.0 compared to NOK 58,500,000.0, but improved as a share relative to net revenue amounting to 17.3% compared to 18.6% last year.

So concluding the second quarter, we showcased a record high operating profit of million, up from SEK30.5 million last year, with an increased operating margin of 15.3% compared to 9.7%. And lastly, let me talk you through some additional financials on the next slide. Operating cash flow amounted to positive 104,100,000.0 compared to positive NOK 105,800,000.0 last year. And second quarter showing a strong cash flow from operating activities, somewhat lower than last year, affected by changes in working capital, but also affected by repayment of tax deferrals amounting to a total of NOK 25,700,000.0 in the quarter. And these were made in accordance with the approved payment plan.

So by the end of Q2, we note that remaining tax deferrals amounted to SEK 69,500,000.0, down from SEK 105,600,000.0 by the end of Q2 last year. And cash flow from investing activities amounted to negative 9,200,000.0 compared to negative 200,000.0 last year, primarily attributable to continued IT investments. And net cash flow amounted to positive CHF 87,100,000.0 compared to positive CHF 93,900,000.0 last year. And we conclude the quarter with a healthy balance sheet with a solid equity ratio of 33.5%, improved from 23.8% last year. And cash and cash equivalents amounted to 259,600,000.0 per the 06/30/2025.

So overall, we are happy to present a quarter with strong financial performance for Nelly Group with record high operating profit and margin. And with that, I hand it back to you, Helena, for some last comments.

Helena Carlin der Ostland, CEO, Nelly Group: Thank you very much, Niklas. This concludes the presentation part of today’s call. But before we move on to answer your questions, I would, of course, like to take the opportunity to once again express my gratitude both to our customers, new and returning for, yeah, following our journey and continuing to support us. Thank you so much. And also, of course, a heartfelt thank you to the entire Nelly team.

Hopefully, most of you are on a well deserved break now, getting reenergized ahead of a very intense and fun, I hope, autumn ahead of us. So with that, let’s move on to the final part of today’s call and answer your questions.

Question Moderator, Nelly Group: Thank you all for joining our presentation of quarter two this morning. We will continue with some questions that we have received. And the first one is for you, Helena, from August. Can any additional of a long and short term sustainable return rate be provided? We have seen a steady decrease in return rates, but a barely increase in net sales.

The current 25% seems low when com low when comparing to peers.

Helena Carlin der Ostland, CEO, Nelly Group: Yes. Thank you. Good question. So I think when it comes to return rates, once again, we we haven’t set an absolute target. We’re very focused on implementing all of our all the different elements of our return strategy.

But I think what is important to remember here is that return rate is not something that you can address and then and then leave it, and it it continues to be low. Return rate is actually something that you have to work with every day as part of your day to day business to to keep it low. So, you know, I think it’s difficult to to to say exactly what the return rates will be going forward, but what I absolutely can say is that we will continue to work with it very proactively every day and in all the different sort of both assortment, customer information, IT systems, and so on to make sure that we, yeah, that we see it as a as a key part of of, yeah, managing our business essentially.

Question Moderator, Nelly Group: Thank you, Elena. Another one. The last year, the return rate was low much lower in quarter two compared to quarter one. Can you elaborate on reasons for this and what the underlying system essentiality in return rate is?

Helena Carlin der Ostland, CEO, Nelly Group: Yes. So I think if you also look historically, we tend to have a slightly higher return rate in the second quarter compared to the first quarter. And that is very much due to a number of factors, including the category mix. So we tend to, for example, sell more dresses in the second quarter, which tend to have a slightly higher return rate. So I think generally, the pattern is that we do have a little bit higher return rates in the second quarter than the first quarter.

However, I think if you look at the the last couple of years, we’ve been we’ve been working so intensively with with our return strategy that actually that that has been a little bit different because we’ve seen such such steady improvement in the return rate. So I think probably what we’re seeing now is a little bit more of a stabilizing of the return rate and a and a pattern that we’ve seen historically, actually. So

Question Moderator, Nelly Group: yeah. Alright. Thank you. Another one from John to this time, Nicolas. Congratulations on a very strong quarter.

I have two quick questions. First, should we expect a senior margin structure in coming quarters due to your operating leverage, or were there any onetime factors this quarter that help profitability? And second, I noticed that inventory levels were slightly elevated in quarter two compared to the same period last year. Could you provide some color on what’s driving that?

Nicholas Linglam, CFO, Nelly Group: Yes. Of course. Thank you, Adeshaan, and thank you very much for the congratulatory comments, Jan. I can comment that we do not account for any significant onetime effects that affected the quarter in a positive way. And regarding inventory levels, a fair question as we do account for high inventory levels in absolute terms, q two twenty twenty five compared to last year.

However, looking at inventory levels as a share or net revenue LTM, it amounts to 14.7% compared to 14 and a half percent. So we we maintain this ratio in relation to sales. And inventory balance per q two twenty twenty five also includes a bigger share of goods in transit compared to last year, which also implies current goods. And in addition to that, we we monitor sell through closely against the target levels. So so overall, we feel confident about our inventory levels.

Thank

Question Moderator, Nelly Group: you, Nicolas. Another one from Alvin at Kalkil. Another congratulations and well done on an expecting quarter. It’s a stabilized gross margin as a result of more attractive prices to our customers to be expected going forward in order to continue growing at the cross level?

Helena Carlin der Ostland, CEO, Nelly Group: So I think, again, here, it’s important to highlight that we obviously constantly optimize across a number of different factors in our business, and gross margin is one of them. Price is another one. So I think we will continue, of course, to do the same going forward. And, you know, it depends on so many factors, and you have to sort of adapt and and and make sure that you listen to the customer. And and sometimes the right answer is to to accept a little bit of a a hit to gross margin in order to to maintain the customer offer.

So there’s no general answer to this, but I think it’s key, as I said, to remember that we constantly optimize on on a daily basis, really. How we make sure we have the right customer offer and balance that against our business, essentially.

Question Moderator, Nelly Group: Alright. Thank you, Helena. Another question from John Despite a soft, consumer sentiment and colder weather during quarter two, you pride it solely year on year, growth and note that spring summer collection was well received. How does your assortment as assortment strategy differ in terms of seasonal goods?

And what do you believe enable you to outperform in quarter two despite colder weather and softer sentiment?

Helena Carlin der Ostland, CEO, Nelly Group: Yeah. Excellent question. I think there’s a few different, parts to this answer, actually. So firstly, I mean, I do really think that we had a very strong assortment this spring and summer, and, we we see that almost regardless of how the market is performing, if we have very, very strong products, our customers respond well to them and and and want to buy them. So I think we did have a great sort of collection of of products on offer during this this spring and summer season, so that was, of course, an important part.

We also, last year, had some challenges around availability because we did not quite anticipate the demand. This year, we were much better prepared and had secured much more depth in our assortment early on. So we were able to meet the demand during that period, which was positive. And then I think also all the changes we have made in our marketing have meant that that we more effectively target the right customer, essentially. So I think the combination of all of those things coming together enabled us to to deliver a good result despite, you know, a little bit of a challenging market, essentially.

Question Moderator, Nelly Group: Thank you again, Helena. Another one from John at SEB. You already seen strong growth in your own brands, but you mentioned that there’s still significant potential to expand into more categories and increase basket size. Could you elaborate on which specific category you see the most opportunity in and how you plan to position your own brands in relation to your external brands offering from Nelly?

Helena Carlin der Ostland, CEO, Nelly Group: Yep. So one important point to make here before I go into the the category specific question is that having our own Nelly brand in combination with external brands is absolutely core to our business. So we’re not we’re not looking to to have one or the other. We’re we’re looking to have the combination of both because we think that that is incredibly strong and important for our customer. Generally, our target audience doesn’t walk around dressed head to toe in the same brand.

It’s it’s important to be able to combine the right set of brands, and that’s what we’re offering. And I think in terms of categories, you know, as I mentioned earlier, I think we have a lot more opportunity in categories where we are already strong. You know, we have a very, very strong assortment coming, I think, in in tops this autumn and winter. We also have some some exciting external brand news coming both in terms of the jeans category and also the sneaker category. But I think also, as I mentioned, knitwear is is very sort of interesting for us and and promising going forward given how well it performed during the second quarter when when that is typically a smaller category, and and that then only grows as the year goes on.

So, yeah, I think opportunity really in in in multiple categories going forward.

Question Moderator, Nelly Group: Thank you again. From John at SEB to you, Helena, marketing costs decreased with marketing costs decreased both in absolute terms and as a share of revenue in quarter two, giving you plans to given your plans to expand into new categories and launch additional stores, do you anticipate stepping up marketing spend in the coming quarter, or is 10% of net revenue a sustainable level going forward?

Helena Carlin der Ostland, CEO, Nelly Group: Again, excellent question. Again, we we don’t we don’t really manage our marketing spend in that way. We manage it very much on, basically, profitability. And so if we see that there is more opportunity to drive marketing profitably, then then we will increase our marketing activities. And and if we see that there isn’t that opportunity, then we will dial it back.

So it is an incredibly dynamic sort of factor for us that we manage according to the market, the customer sentiment, our assortment, where we are in the season. So so, of course, you know, the the one the one and only KPI really that that is absolute for us is is that we drive marketing activities profitably.

Question Moderator, Nelly Group: Thank you again. Another one question, and this time to you, Nicolas, from Call. Approximately, how large part of sales comes from the physical store?

Nicholas Linglam, CFO, Nelly Group: Well, thank you. Good question there. But our flagship store has has, obviously been an important venue for us to meet meet with customers in in a new way, host events, and and expose our brand. As a share of of total sales, however, sales from our physical store still amounts to to a smaller share, but, obviously, we we’ve seen a lot of other positive effects from from having a physical store.

Question Moderator, Nelly Group: Thank you, Nicolas. The last and final question to you, Helena, from Carl. What have you changed in your market marketing more specifically to make it more effective?

Helena Carlin der Ostland, CEO, Nelly Group: So, really, if you look at our marketing, obviously, it it importantly consists of our paid marketing and our organic marketing. And in terms of the paid marketing, I would say that the key factor is that we have completely changed our way of working and manage our marketing spend based on where we can generate profitable transactions. We have some very strong we’ve had some very strong additions to the team over the last year. And so I think that team is really managing that marketing spend incredibly well for us, constantly adapting and adjusting based on on the situation. So I think that’s made a big difference.

And then in terms of organic, as I said earlier, we have focused very much on our social channels. We have stepped up activities in some pretty well established channels like Instagram and TikTok, but we’ve also started to sort of work a little bit with some new channels that we see growing going forward. And we’ve just increased our activity there, and we see that, again, we we have an incredibly positive response from our target audience. They enjoy our content. They engage with us.

And, yeah, they they they build a relationship with with the brand and the and the products in a way that only really social social channels can. So so I think a number of changes is the answer, have taken together, made our marketing really, as I said, effective and and impactful, which is, of course, very pleasing to see. Okay. That was the last question. So I think with that, we conclude today’s call.

Thank you very much everyone for listening, and hopefully, we’ll be talking to you again next quarter. Thank you very much. Thank you.

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