It’s still a long way from 100 million in operating profit to the bottom line, if we even get close to it eventually.
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Exactly! Puuilo is currently the cheap store in perception and in practice. Tokmanni is unfortunately falling between the cracks from all directions. The food department and its prices are not even a challenger to the S- and K-groups. The sports department is not a challenger to sports stores in prices or at least in quality. When there’s hardly any information about the fishing department and car spare parts are not sold, then what is sought from there?
Well, toilet paper, of course. That is, if 32 rolls are on sale for dirt cheap. If not, then it’s just a quick walk past the checkout. This is not profitable business.
What would I do if I were Tokmanni’s development director? I would get the fishing departments in top shape by hiring a dedicated jigging/ice fishing enthusiast for each store, who does it with a big heart and as a self-taught expert. They would prepare ready-to-sell jigs and build ready-to-use bait rigs for salmon anglers. For cabin owners, they would sell the best fishing nets and fish traps, not any junk. Next, I would limit the food department to filter bags, coffee, ketchup, mustard, quality tuna, noodles, and pea soup. I would stop, as unprofitable, disregarding people’s common sense and the attempt to sell hard old bulk candies at the same price as the Citymarket merchant next door sells premium Candyking candies straight from heaven.
So, half-sized premises, a few competitive and high-quality departments, and seasonal products in perfect order. This is what Puuilo does, but not quite as well.
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It depends a bit on what size of stores we are talking about. It’s probably not Tokmanni’s intention to be able to challenge hypermarkets in prices. Spar will also practically compete in the category of markets and at most supermarkets.
A couple of hundred new employees and fishing gear for every store at the expense of other products?
Efficiency in personnel costs is one significant thing for a company like Tolmanni. Granted that it will then reflect in the quality of the customer experience.
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I might have been partly responsible for this, or at least I assume so from your message. If so, the same thought still applies – at least in my opinion. Puuilo has the same discount store elements and items as Tokmanni, but there is a lot of difference in the sales mix between the two.
But where could Tokmanni learn from Puuilo? In my opinion, in many things, but bringing up a few generic points, here are a few observations:
1/ Puuilo sells fast-moving goods with a good margin. This works really well for Puuilo’s current situation, i.e., for a growth company! (Puuilo 50 stores vs Tokmanni 200 stores, in Finland).
2/ Puuilo’s item counts are remarkably low compared to Tokmanni. This works for Puuilo. Should Tokmanni drastically reduce its item counts and seek profitability through that? Don’t Puuilo and Normal operate this way? And as I understand it, DollarStore also operates with a smaller item count and is damn cost-effective? 
3/ Tokmanni’s and Puuilo’s growth? Where does the growth company Puuilo seek growth from? Should it not increase item counts like Tokmanni, should it not expand abroad like Tokmanni? Should it not increase the number of physical stores like Tokmanni? I don’t know, it’s a difficult case.
To put it populistically, one could say it’s easy to grow from a few stores to 40-50 stores, but to grow to 200 stores, considering the extra “couple of hundred stores” abroad, that’s not easy. Tokmanni probably grew in the same proportion as Puuilo back in the day, from a few tens to hundreds…
Well, the idea was to bring up things from different perspectives; it’s not easy, and I especially apologize to @Kivikko – by no means is it my intention that someone feels my writing is such that they have to remove their own post. My sincere apologies!
And still, and nowadays, I have a fairly large holding in Puuilo – it just keeps growing! (great company!!) 
and nowadays a much smaller holding in Tokmanni, due to damn poor profitability.. (I still go and buy the good club offers!!, it really has cheap stuff – I don’t understand why people say it’s expensive, it’s actually cheap when you buy the cheap stuff for home – I don’t understand!)
PS. Could someone tell me an anecdote that puzzles me? People keep repeating that no one visits Tokmanni, all stores are empty… But then when you look at 01-06/2024 vs 01-06/2025, revenue is +3%. Doesn’t that mean that buyers, i.e., customers, are 3% more than in the corresponding period last year? How does this mean that fewer people are at the checkouts than last year?
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I don’t own either stock. I have considered Puuilo. There’s a certain small carelessness at Tokmanni across the board. I myself might also buy toilet paper or sparkling water. Other things then with some loyalty program benefit and an app. Sale items run out on the first day. Staff can’t be found and they don’t know anything about the products. In May, when the flowers arrived, the whole stock froze, and later they were left unwatered. Should there be an old-fashioned store manager who would ensure things run smoothly? Now it feels like the customer is not almost always right. Cashiers and other staff could greet customers. This is already done in many stores. Was Kyösti Kakkonen right after all when he mentioned at some point that “they ruined a good store”? Improvements are needed.
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In Espoo, there are Puuilo and Tokmanni next to each other in Laajalahti, Espoo. Tokmanni has a wider selection, but Puuilo is cheaper if the same products are found in both. Puuilo is not much cheaper, usually ridiculously little. I observed that just today, so I bought from Puuilo. That’s the perception. My self-esteem was satisfied when I saved.
Oh, and Puuilo in Espoo had excellent service when I took my hedge trimmer for warranty service. They had even washed it, and the service took one day.
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Well, I got involved in this again. Forecasting sales performance is certainly difficult, but perhaps under the new CEO’s leadership, even slightly more pessimistic estimates will be given in the future. Now it feels like, because of this negative news, the price dropped a bit too much.
Puuilo’s CEO, as far as I understand, has been on the selling side, whereas Saastamoinen acquired shares worth a million euros earlier in the spring. Regardless of what one thinks of these companies, at least in my opinion, Tokmanni’s stock is currently available at a cheaper price.
And as mentioned above, with a market capitalization of EUR 550 million, profits of EUR 85-105 million this year. Doesn’t sound bad at all. The amount of debt is what concerns me here, and for this reason, the shares might be quickly sold if the slide continues. Perhaps as early as next week, when another general merchandise store, UPM10, reports its own results.
A year ago, with this stock, I was annoyed by the mystery surrounding the payment of the second half of the dividend. Apparently, this is their way, and they will operate similarly this year. At that time, I promised myself never to touch this stock again, but here we are again.
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Should Tokmanni convert some stores into Dollarstores and try how that concept would work? However, Finns have become fond of those foreign chains like Normal, Rusta, etc.
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Quite a diverse and good discussion regarding the profit warning above. Indeed, this was quite expected, especially due to the weak weather in June. Perhaps the magnitude of the warning was slightly larger than I had anticipated, and I myself couldn’t lighten my position at 11 euro prices, because after disappointments, there’s always a small chance that we might still be positively surprised; Nokian Tyres succeeded in this yesterday. However, it seems it would have been wise to follow the big players this time; some time ago, I noticed in Kauppalehti that as much as 8% of the share capital was on loan, although visible short positions were only about 1.5%.
In my opinion, the main problem is that management’s focus has been scattered in too many directions, and could it be that decision-making power for various experiments and strategy implementation in general has trickled down to lower levels, for example, Anders Kind’s previous 2*Neton neton netto-days in Sweden. From management’s perspective, too much is happening, too quickly, and in too many places.
Of course, there are headwinds coming from many directions right now; on the other hand, for example, low consumer confidence alone doesn’t quite serve as an explanation, because some operators are performing quite well. Weather conditions are known to affect Tokmanni possibly more than competitors, because outdoor and garden products play such an important role during the spring season. When the main category doesn’t perform, the result falters. What about the situation with their advertising flyers? It feels like they end up in my household quite irregularly; there’s no room for laxity here either!
Revenue is indeed growing like bread dough; I wonder if it’s happening again that the role of low-margin everyday goods has grown, as it was specifically mentioned in the warning that more expensive durable goods remain on the shelves. It could, of course, also be that they are bought from competitors, which would then already be a worse thing for competitiveness. I myself only actively follow Tokmanni; @Arttu_Heikura probably has a more comprehensive view on whether competitors are complaining about exactly the same things!? In any case, customers probably visit the stores quite well, but the average purchase seems to be still decreasing, and Tokmanni doesn’t get enough profit from the purchased products.
It was also mentioned above that quite good personal offers come through the App, very often such that if you have bought a product at a so-called normal price, the same product appears in the app with a significant discount within a couple of days. Of course, this too can annoy someone if there’s no need for additional purchases. I personally prefer to spread out my purchases🙂.
Debt covenants must be monitored; it’s quite possible that the autumn dividend will not be paid. With this level of indebtedness and performance, it would not be a big surprise.
Yes, and finally, of course, as a long-term owner, I am disappointed, but I will continue on my chosen path with a 13% ownership stake in the portfolio. Additional purchases will be made according to the situation, and often when it’s darkest, dawn is near🙂.
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Bankruptcy is certainly not coming, but it’s good to consider Tokmanni’s stretched balance sheet here, meaning comparing enterprise value (not market value) to operating profit, so the valuation doesn’t look glaringly cheap.
In stores, these two have roughly the same number of items, about 30 thousand, but Tokmanni probably has more in the end when considering products sold in the online store and delivered directly from the supplier’s warehouse. Ultimately, it’s about what kind of goods are sold and how much costs are incurred in managing the assortment. Tokmanni has many different store concepts where the number of items varies greatly. At the same time, assortments may differ between stores, as stores can be found today “from Hanko to Nuorgam”. This increases costs. At Puuilo, the variation is not this great, and often exactly the same product items are delivered to stores, though quantities vary according to sales.
The development of comparable, i.e., old, stores has been quite modest (decreased in Q1 and likely developed steadily or decreased in Q2 as well), so that growth has been supported by new stores. Growth in old stores is more efficient from a profitability perspective and thus more valuable.
Based on that announcement and competitors’ comments, seasonal sales have been weak. Then, looking at the realized figures, it can be concluded that inventory has had to be cleared (so that too much seasonal merchandise doesn’t remain in stock) by giving quite significant discounts specifically on seasonal products. That growth in daily consumer goods might also be a factor, but the biggest driver is likely discounts. I will return to this with a report, which will be in Monday’s breakfast at the latest. 
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It’s possible this has been discussed by management, as they themselves have praised how good the Dollarstore concept is. I personally believe that the Tokmanni brand is very well known here in Finland, even though growth has been sluggish in recent years. In Finland, Dollarstore is practically only known by investors and some retail professionals. Thus, for the change to succeed, very strong brand-building investments and price reductions would be required, which would weaken the profitability of a reasonably profitable Tokmanni store for some (who knows how long) time. This would also increase complexity, for example, from the perspective of logistics (Tokmanni and Dollarstore store selections differ) and marketing (2 different concepts, or caricaturedly, 2 different advertisements). Are Tokmanni’s management or investors ready for such a big change?
Rusta, however, is a good example of a successful concept change in Finland, although it took several years for the operations to become profitable. On the other hand, the store base to be changed (to my knowledge, there were about 30 HongKongs) was clearly smaller than Tokmanni’s 200 stores!
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Didn’t Dollarstore’s CEO just recently leave the company? Is it possible or even a risk that Tokmanni’s management starts steering Dollarstore towards Tokmanni’s concept, and would that then be too different for Swedes? Furthermore, how have Dollarstore’s sales and profitability developed under Tokmanni compared to the time before Tokmanni?
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Jussi Halme has made a pretty good video about Tokmanni.
*Tokmanni’s profit warning shook the markets and wiped over 14% off its share price in one day. *
*Is this a temporary problem or a sign of a deeper structural crisis? In this video, I delve into Tokmanni’s situation: what led to the profit warning, why now, and what an investor should think about this. *
Is this a buying opportunity or should one press the sell button?
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The biggest problem with Tokmanni stores is that they are so unpleasant to visit. And the biggest problem with the Tokmanni online store is that it is technically clearly the weakest when talking about even slightly larger Finnish retail companies.
In the “My experiences with companies” thread, I wrote a couple of weeks ago: “Today I went to Tokmanni to pick up an online order. A hellishly long queue at the checkout, how else. When my turn came, the salesperson asked me to move next to the checkout to wait for another customer service representative to serve me. I waited for a while, and the salesperson also noted at one point ‘yes, they’ll probably be here soon’. At some point, I then said, ‘excuse me, but I can’t be bothered to queue twice for the same package’ and left the store. I don’t intend to repeat that customer experience anytime soon, but rather favor stores where I can get service with one queue.”
Then about the online store. It really works haphazardly. Sometimes you can’t seem to add products to the shopping cart. Sometimes you can’t seem to remove them from there / change the quantity. Sometimes it has happened that in the shopping cart, the quantity discount for a product has doubled (which the customer, of course, cannot be sorry about). And recently, it happened to me that an entered discount code increased (!) the price of the shopping cart. The ordering process is another story. It’s not uncommon for an order containing basic products worth, say, 50 euros, to be delivered in two or even three installments. And when you then queue for those at the checkout, shopping becomes difficult.
How could Tokmanni stores be more pleasant to visit? Well, firstly, remove the obligation in some stores to go through the entire store to get to the checkouts. Secondly, clarify the product display. Thirdly, do something about those checkout queues; find ways to reduce the number of price errors that jam the queues. Or even serve customers in queue order - even if it’s a package pickup (i.e., in situations where the packages are located next to the salesperson).
Before someone says that for Tokmanni, the online store is just a small sales channel and discount stores are not meant to be Citymarkets… The online store could be a much more significant sales channel. And no Citymarket customer experience is needed; for example, here in Pirkanmaa, it would be enough to reach the level that Tokmanni’s predecessor Vapaavalinta was at.
Improving the customer experience would be important specifically for the sale of higher-priced products and for increasing products other than just campaign items.
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Now that a new leader is coming, is it possible that the least profitable stores will be closed?
In smaller localities, the selection of construction and DIY products should be expanded. There is no competition for them there, but there is always demand in rural areas.
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On seasonality and the impact of weather in the retail sector (in broad assortment retail, such as Tokmanni):
Weather does have an impact, but when managed correctly, it’s mainly between product categories. A traditional measure of the board’s (demand) level is whether weather is accepted as management’s explanation. You have built A) the assortment and/or B) commercial activation and/or C) the store network lazily, if a weather explanation for weak sales “gets through” to management and the board itself. Weather impacts when only one category is sold, such as ice cream or beach toys - a general merchandise store performs excellently in the rain. Go count the cars at Jumbo’s parking lot today at 2 PM, for example, and do the same exercise on a rainy day.
Some somewhat concerning tones have indeed started to accumulate in the Tokmanni story.
• restlessness about the functionality of its own Tokmanni concept, which is particularly evident in weak Comp Growth development, which in turn is reflected in weak profitability development
• The future of Dollarstore - Tokmanni wants to tinker with the concept, but is the direction viable
• weak expansion potential in Finland and new stores are likely to decrease profitability. I wonder how investing in the purchasing power of, for example, Ähtäri (5000 consumers, of whom a minority are working age) can improve profitability?
• Will the fresh-PT-Tokmanni work on a new front and will a replicable concept be found, or will development resources be wasted? On this new front, competitors are even tougher than in the current division.
• Regarding its own discount store home front, competitors have started/are starting a phase that will likely hit Tokmanni. Rusta, Jula, Biltema, Puuilo, and Temu are in a phase where they will invest heavily in market shares (and store locations) in the coming years. Market growth will not be enough to compensate for 40-60 competitor stores opening next to their own by the end of the decade.
• I also don’t consider it impossible that within 5 years, Action, Netto, Costco, or Amazon would come to Finland. These are 4 competitors of such a level that they are demonstrably capable of carving out a clear market share in all markets. And then Tokmanni will also be hit. All 4 will not come, but 1-2 of them might. The Finnish retail landscape was very different 10 years ago with Anttila. It is certain that it will not be saturated by 2025 either.
• Tokmanni’s marketing strategy demonstrably worked well from 2000-2020. Due to changes in media usage and consumer profiles, one wonders if direct distribution + Hi/Lo/Offers will still work as effectively in 2025-2030?
I have no doubt that Tokmanni will solve some of these challenges, perhaps even several? But can Tokmanni solve all 7 challenges? And if even one of the aforementioned challenges remains unsolved, it will unfortunately contribute to a decrease in profitability. As @Arttu_Heikura stated, there are many irons in the fire. And Tokmanni’s management’s solution seems to be to add more irons to the fire!
Here’s some further discussion for those interested about the direction of the Dollarstore/Tokmanni concepts:
https://keskustelut.inderes.fi/t/tokmanni-mahdollisuuksien-valintatalo/2105/3234?u=peruspiensijoittaja
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Tokmanni’s strategy seems to be to establish as many stores as possible even in small municipalities. One was established in a neighboring municipality when a hardware store closed down. Population approx. 4000. Ad flyers do come twice a week, at least ten A4-sized pages. Those coupon offers are mostly quite rubbish. There do seem to be loyal customers, as almost everyone recalls their phone numbers at the checkout. And indeed, you can only get to the checkout by going around the entire store. There’s a wall in between. I don’t believe in a quick rise.
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However, from that 85-105 million, owners are left with approximately 40-50 million euros after financing costs and taxes, to which @Gadus already referred above.
The most concerning thing here, in my opinion, is the general trend of business profitability, and that expansion outside Finland is not necessarily a success story either. Somehow Kamux reminds me of Tokmanni. I don’t see any huge special expertise in either of these with which enormous amounts of money could be made abroad.
The trinket trade and used car dealing do not otherwise belong to my interests as an investor, which the reader should note.
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And more about the weather 
This was forgotten to be linked to the May-June weather. The weather doesn’t automatically silence trade.
Clas Ohlson in May-June, in the same rainy/cool weather conditions in Finland +4% and in Sweden +8% - and of course Comp Growth! Will we hear in the earnings report how success is always due to one’s own skill, and poorer results are then blamed on the weather? 
Finnish consumer and confidence
Another topic I’ve been pondering lately. And this naturally affects Tokmanni, but also the entire retail sector. If this topic belongs more to the “Kauppa on se, mikä kannattaa” (Trade is what pays off) thread, then the administration can move it there. I also pondered the same theme in the Kesko thread and suggested @Arttu_Heikura ask CEO Rauhala for his view on the matter as well.
Facts:
- interest rates are now below the long-term average
- inflation 0.2% (June 2025)
- Finnish income levels have already risen by over +15% in the 2020s.
YET:
Consumer confidence is low, and trade is not booming.
For consideration
Which metric, in addition to the previous 3, should have changed for the Finnish consumer to wake up? Is the trade in used goods already much larger than we believe (no statistical data) and eating into the share of well-documented new goods trade? Did @Timo_Huhtamaki also anticipate this long-term megatrend in this thread a while ago? Or is the aging of Finns now visible in the real economy, because pensioners are not known to consume, and the state’s permanent deficits/indebtedness mean that in consumption and trade, this low level is the new normal?
Have Finns perhaps permanently become a slightly poorer and less consuming nation, which is also reflected in trade? Do macro-experts @Verneri_Pulkkinen & @Marianne_Palmu deny or agree with this question?
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Excellent discussion, esteemed fellow investors.
I have nothing further to add to this than the layman’s observation that although one might intuitively think otherwise (“trade is what pays off”), retail, despite its certain defensiveness, is not an industry where a large and established business automatically, in Sauli Vilén’s words, “chugs along,” and an investor could trust to break even just by waiting. If the engine starts to sputter, even a large player can very well crash into bankruptcy (e.g., Anttila, Tiimari, Erätukku, Seppälä).
Tokmanni was a medium-sized investment in my portfolio for about five years (in the range of 1-3%), but I gradually sold all of it off in 2024-25, mostly at a loss. The last shares were sold after Q1/25, when poor results combined with a blurring of strategy. Thanks to @Arttu_Heikura for the good critical analyses. Let’s hope that Tokmanni’s story still takes a better turn.
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