This article first appeared on GuruFocus .
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Net Sales:EUR3.4 billion, up by EUR190 million.
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Comparable Operating Profit:EUR194 million, with an operating margin of 5.7%.
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Rolling 12-Month Net Sales:Nearly EUR12.9 billion.
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Return on Capital Employed:10.4%.
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Cash Flow from Operating Activities:EUR362 million.
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Capital Expenditure:EUR127.4 million, lower than Q2 2025.
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Net Debt to EBITDA:Improved to 1.7 from 1.9.
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Grocery Trade Net Sales:Over EUR1.6 billion, increased by EUR15 million.
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Grocery Trade Comparable Operating Profit:EUR110.6 million, down by EUR700,000.
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Building and Technical Trade Net Sales:Increased by EUR176 million to over EUR1.4 billion.
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Building and Technical Trade Comparable Operating Profit:EUR71.2 million, with an operating margin of 5%.
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Car Trade Net Sales:Increased by EUR1 million to EUR353 million.
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Car Trade Comparable Operating Profit:EUR18.4 million, decreased by EUR3.2 million.
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Profit Guidance for 2026:Comparable operating profit expected to be EUR670 million to EUR730 million.
Release Date: July 22, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Kesko Oyj ( KKOYY ) reported a significant improvement in profit, driven primarily by the technical trade sector.
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Net sales grew across all divisions, with notable increases in building and technical trade, grocery trade, and car trade.
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The company gained market share in the grocery trade, with K Group stores showing strong performance.
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Kesko Oyj ( KKOYY ) announced a strategic acquisition of Dahl's operations in Sweden, Norway, and Denmark, which is expected to strengthen its position in the technical trade sector.
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The company's financial position improved, with cash flow from operating activities reaching EUR 362 million, supported by effective working capital management.
Negative Points
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Operating profit declined slightly in the grocery and car trade divisions despite sales growth.
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Kespro, a part of the grocery trade division, experienced a EUR 2.2 million decline in profit.
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The car trade division saw a decrease in operating profit due to a higher share of used car sales, which have lower margins compared to new cars.
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The Baltic countries experienced a slight decrease in profit within the technical trade division, attributed to investments in logistics centers and price pressures.
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The company's updated profit guidance for 2026 reflects a narrower range, indicating potential uncertainties in achieving higher profit margins.
Q & A Highlights
Q: What is driving the strong margin in grocery trade despite price investments? A: The margin expansion in grocery trade is attributed to effective use of data and strong customer focus, which enhances campaign efficiency. Despite a EUR2.2 million decrease in Kespro's profit, the grocery business is performing well and gaining market share.
Q: What kind of earnings uptick is expected for Dahl in 2026 following the acquisition? A: Kesko cannot comment on Dahl's specific figures for 2026. However, the acquisition is expected to align with Kesko's strategic goals in technical trade.
Q: Why does Kesko expect significant growth in car trade EBIT in the latter half of 2026? A: Kesko anticipates strong growth in car trade EBIT due to a 40% stronger order book for new cars compared to the previous year, which is expected to drive sales in the latter part of 2026.
Q: Why didn't Kesko narrow its EBIT guidance range more positively despite strong H1 performance? A: Kesko remains cautious with its guidance, considering potential positive and negative changes in the building and technical trade sectors. The company is optimistic about positive developments but prefers to maintain a balanced outlook.
Q: What impact is the Middle East crisis expected to have on Kesko's operations in H2? A: The impact is expected to be moderate, particularly in the grocery business concerning food prices. Kesko does not anticipate significant changes in 2026 but will monitor the situation closely.
Q: Why did Onninen's profits not improve in the Baltics despite solid sales growth? A: The slight decrease in EBIT is due to investments in new logistics centers across the Baltic countries and price pressures. Kesko expects improved performance as volumes increase.
Q: What is Kesko's view on Finnish consumer demand given recent improvements in consumer confidence? A: While consumer confidence has improved, Kesko has not observed significant changes in consumer demand. The grocery business is gaining market share, and the car business has a strong order book, but overall consumer demand remains stable.
Q: Is retail media becoming a significant part of Kesko's grocery division profits? A: Yes, retail media is a relevant and growing part of the grocery division's profits. It offers efficient marketing opportunities and measurable results, providing long-term growth potential.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
