IKH’s revenue decline has softened. Grafton’s CEO sees significant recovery potential in Finland.
In Finland, IKH’s average daily like-for-like revenue decreased by 6.4 per cent in the Period, reflecting continued weak market conditions albeit the decline has eased significantly in comparison with the period from May through to August.
I, on the other hand, thought that we hit Inderes’ forecasts quite well, and revenue even exceeded them (I give less weight to other parties’ forecasts as I don’t know what all the “consensus” has included). Profitability, of course, now falls short of forecasts simply because it’s a Finnish company, so such a small shortfall was more of a forecast beat for me 
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And what does some online store matter if business is excellent in brick-and-mortar stores with good profitability? I, for one, don’t want to order anything and then have to return it if it’s not suitable; I’d rather go and buy it in person 
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Well, probably because it’s the fastest-growing consumption method, and if you don’t develop in that area, competitors will take those sales.
Kärkkäinen is, of course, a poor comparison due to its sparse store network, but its online store accounts for about a third of its sales. For many discount stores, it’s like the sales of one store.
I believe that in Puuilo’s case, part of the problem is that most of the goods sold are things that are needed “right now,” such as bolts and nuts, which drives customers to brick-and-mortar stores to get them, instead of being able to wait three days for the post office to deliver them.
Here’s a first look at the results before the earnings reports:
Analysts’ growth expectations for Q4 need a slight adjustment, at least based on the initial review of the report. We’ll see what happens to the forecasts for future years at the end of the day.
In the online store, it seems that high-priced consumer goods are the biggest bottleneck, as they are sold significantly more there than in physical stores.
Puuilo’s share price even made headlines in Iltalehti:
The same newspaper has, of course, also shown broader interest in the share price movements of discount stores.
I would buy more if it wasn’t already in my portfolio with a reasonable weight. Not everything needs to grow crazily all the time, and analysts’ talk is mostly useless as a rule. One must look at the business itself and whether it has vitality. Buffett also didn’t rush with these things; instead, he looks beyond one quarter. Of course, competition has tightened and the average purchase has decreased, but the concept is good, and if it performs well in a low-growth environment, then everything is okay.
Impressive figures from Puuilo, however, the market situation is genuinely challenging.
When the company achieves such results during a downturn, what can be expected when the economy has tailwinds?
I personally visit Puuilo weekly; there are always plenty of customers, and finding a parking spot is often difficult.
The price perception is affordable, but there are indeed products that are very expensive; the exorbitant profit margin must come from somewhere.
This is a top company on par with Harvia; a small dip in the share price doesn’t matter.
The market seemed to have predicted a positive surprise for Puuilo, which resulted in a negative share price reaction.
I personally don’t see any business weakness in the big picture. Feel free to challenge.
I wouldn’t be worried about the decline in online sales. In @Arttu_Heikura’s interview, this was justified, for example, by the fact that stores have opened in smaller localities, which has enabled direct store visits. And as stated, there is often an immediate need for the product.
