Earnings call transcript: Clas Ohlson posts strong Q1 2026 growth, shares rise

Clas Ohlson reported strong first-quarter results for 2026, with revenue and profit rising significantly. The Swedish retailer's net sales increased 16% to approximately 4.1 billion kronor, driven by 11% organic growth and 3% from acquisitions, along with 2% from currency effects. Operating profit climbed to 339 million kronor, up from 278 million kronor a year earlier, marking a 40% increase.

Gross margin expanded by 1.8 percentage points to 47.5%, a result of favorable currency moves and improved supplier pricing. Earnings per share surged 45% to 4.75 kronor, surpassing the forecasted 4.11. Online sales grew 18% organically, contributing 22% to total sales. The company stopped forward currency hedging, allowing future exchange rate fluctuations to impact earnings directly.

Operating cash flow rose 42% to 663 million kronor, and return on capital employed reached 34.9%, above the company's long-term target of 30%. Management highlighted the company's strong start to the 2026/2027 fiscal year, stating that sales, margins, and cash generation all improved. For investors, Clas Ohlson demonstrated growth that exceeded its stated long-term targets while maintaining high margins and returns.

The stock rose 4.32% to $465.8 per share, nearing its 52-week high of $471.5. The company's financial health remains robust, with a return on equity of 42% and an InvestingPro Financial Health score of "GREAT." CEO Kristofer Tonström emphasized the company's commitment to profitable growth through a combination of initiatives rather than relying on a single major bet.

CFO Pernilla Walfridsson explained the decision to discontinue currency hedging, stating that it primarily shifts the timing of the impact rather than eliminating the underlying exposure.