This article first appeared on GuruFocus .
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Net Sales Growth:Increased by 9.9%; 8.7% excluding currency effects.
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Like-for-Like Sales Growth:2.2% excluding currency effects.
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Gross Margin:Improved by 1.7 percentage points to 44.3%.
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EBITDA:Increased by 17.6% to SEK 330 million, with a margin of 9.5% (up from 8.8% last year).
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Cash Flow from Operating Activities:Increased by 60.7% to SEK 758 million.
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Operating Expenses:Decreased by 0.3 percentage points as a share of net sales to 32.9%.
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Net Cash Position:SEK 587 million at the end of the quarter.
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Store Count:248 stores across markets (129 in Sweden, 57 in Norway, 52 in Finland, 10 in Germany).
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Segment - Sweden Net Sales:Increased by 6.6%; like-for-like growth of 2.4%; EBITDA margin (excl. IFRS 16) improved by 2.4 percentage points to 21.4%.
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Segment - Norway Net Sales:Increased by 7% excluding currency effects; like-for-like growth of 3.2% excluding currency effects; EBITDA margin (excl. IFRS 16) improved by 1.8 percentage points to 13.7%.
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Segment - Other Markets Net Sales:Increased by 13.2% excluding currency effects; like-for-like growth of 0.7% excluding currency effects; EBITDA margin (excl. IFRS 16) improved by 2.5 percentage points to 6.2%.
Release Date: September 09, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Rusta AB (publ) ( OSTO:RUSTA ) delivered a solid start to the financial year with net sales growth of 9.9% and improved profitability across all segments.
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Gross margin improved by 1.7 percentage points to 44.3%, driven by successful assortment renewal and positive currency effects.
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Cash flow from operating activities increased by almost 61% to SEK 758 million, reflecting strong cash generation and a strengthened balance sheet with a net cash position of SEK 587 million.
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The company continues its high-paced expansion with five new stores opened in the quarter and a solid pipeline of 14 stores planned for the fall, maintaining its guidance of 65-80 new stores over three years.
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The store concept renewal is driving like-for-like growth, with the next phase (health and beauty) rolling out in September, and the company is seeing positive results from its updated stores.
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EBITDA increased by 17.6% to SEK 330 million with a margin of 9.5%, driven by strong gross margin development and continued good cost control, with operating expenses as a share of net sales decreasing.
Negative Points
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Rusta AB (publ) ( OSTO:RUSTA ) expects continued geopolitical uncertainty to lead to higher freight costs and cost of goods by the end of the second quarter.
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The company experienced negative currency translation effects on balance sheet items due to a quick change in the USD/SEK rate, which increased central function costs.
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Finland and Germany continue to face challenging market conditions with negative customer sentiment, although the company is reviewing its strategy to unlock potential in these markets.
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The ramp-up of the central warehouse automation project is still in progress and not yet at full capacity, which entails extra costs during the ramp-up phase.
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The company is transitioning to a new ERP system with a total estimated investment of around SEK 80 million, which will be a split between CAPEX and OpEx.
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Like-for-like growth in other markets (Finland, Germany, online) was only 0.7% excluding currency effects, lagging behind the more mature markets of Sweden and Norway.
Q & A Highlights
Q: Can you elaborate on the gross margin increase drivers and the sustainability of the margin into H2, given rising freight and purchasing costs? A: Cathrine Wigzell (CEO) explained that the gross margin is built from several factors, including ordinary prices, intake margin, and news value, which was strongly supported by home decoration this quarter. Positive currency effects also contributed. The company decides how much to invest in pricing and campaigns based on these factors. Sofie Malmunger (CFO) added that while currency tailwinds exist, the company can choose to use them to invest in pricing, improve offerings, or mitigate increased costs like freight and purchase prices.
Q: What is the sustainable gross margin level, and is the company happy with the current level around 44%? A: Cathrine Wigzell (CEO) stated that the company is "never happy," but historically, a gross margin around 44% is a normal level for Rusta, considering its financial goals. Sofie Malmunger (CFO) reiterated that currency tailwinds can be used to invest in pricing or mitigate increased costs. The company aims to remain a price leader and will use positive FX tailwinds to lower prices and drive campaign sales to gain market share.
Q: How much of the margin increase in Norway is organic versus driven by FX, and how much survives a weaker NOK? A: Sofie Malmunger (CFO) stated that the profitability development in Norway is supported by a stronger NOK, which positively impacted the gross margin in Q1. The company does not comment on specific market splits, but noted that the FX effect was heavily negative for the Norwegian segment last year, making the current positive effect particularly significant.
Q: What is the guidance for costs related to the new ERP system, and what is the split between capitalized and operational expenses? A: Sofie Malmunger (CFO) confirmed the transition to a new ERP provider to gain retail-specific functionality. The total investment is estimated at around SEK 80 million, split between CAPEX and OpEx. This investment is in line with the company's growth strategy and will not affect its ability to meet financial targets. No specific split guidance was provided.
Q: Can you provide more detail on the profitability development in Finland and Germany, excluding the online business? A: Sofie Malmunger (CFO) stated that the "other markets" segment includes Finland, Germany, and online as a channel. The company has seen positive profitability development across the entire segment, including both Finland and Germany, despite challenging market conditions. The online channel is a small but high-growth and profitable part of the segment.
Q: What is the status of the warehouse automation ramp-up, and are there any additional costs expected in Q2? A: Cathrine Wigzell (CEO) confirmed the automation project is progressing according to plan, with capacity increasing daily. The company is in the ramp-up phase and awaiting the final acceptance test. Sofie Malmunger (CFO) noted that while ramp-up phases typically incur extra costs, the company managed to decrease its total OpEx share in Q1, indicating good overall cost control.
Q: Can you elaborate on the sales development across the months in Q1 and the current trading in Q2? A: Cathrine Wigzell (CEO) stated that sales were quite stable across the quarter, though market data showed unevenness between months in different countries. For current trading in Q2, the company sees stable growth. However, Q2 has the highest share of sales in the last month, making the quarter's performance more unpredictable.
Q: What gives you confidence in the significant store expansion in Finland, given its lagging sales and profitability? A: Cathrine Wigzell (CEO) acknowledged the high tempo in Finland but reaffirmed it as a long-term important market. The key is unlocking its potential by strengthening brand awareness and sharpening the offer and marketing communication with Club Rusta. She drew parallels to the successful journey in Norway, noting it takes time to raise profitability in newer markets.
Q: What is your view on the state of the consumer across your different markets? A: Cathrine Wigzell (CEO) observed a more positive customer sentiment in Sweden and Norway. In contrast, Germany and Finland remain tough markets with more negative consumer sentiment, despite some recent improvement in Finland. As a low-price leader, Rusta aims to invest in prices and gain market share in these challenging environments.
Q: What is the size of the online business within "other markets," and what is its profitability profile? A: Cathrine Wigzell (CEO) stated that online is a low single-digit share of "other markets" but is an important channel for future growth, with a high share of increased sales and good profitability. Sofie Malmunger (CFO) added that the online channel is performing very well, and the sales mix in the channel was particularly good this quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
