Axfood Ab Ordinary Stock Earnings Reports

Axfood reported Q2 2026 results with modest sales growth but improved earnings and margin stability despite a market affected by food price deflation and a VAT cut on food (12% to 6%). Market growth adjusted for deflation and calendar effects was strong (4.9%), while Axfood's retail sales rose 2.1% and consolidated net sales grew just below 1%, driven mainly by higher volumes. Group operating profit increased to SEK 964m (adjusted SEK 972m) with an operating margin of 4.2%; earnings were helped by volume, stable gross margins and cost control but negatively impacted by deflation and SEK 40m higher fuel costs. Performance by chain: Willys grew 1% (‑1% like‑for‑like) and saw weaker like‑for‑like sales vs. high comps from 2025; Hemköp outperformed with >7% retail sales growth and margin expansion; City Gross narrowed losses as restructuring continues and a pilot new store concept launched; Snabbgross was flat; Dagab grew ~1% with productivity gains from logistical changes. Cash flow was weaker in Q2 (SEK -47m) largely due to VAT cut impacts on working capital; Andersen quantified ~SEK 700m negative NWC effect in H1 with roughly half attributable to the VAT change. Net debt rose vs year‑end 2025 (partly via leasehold debt and facility utilization) but net debt/EBITDA improved sequentially; equity ratio was 19.1%. Investments YTD SEK 927m (stores, warehouse automation); seven group‑owned stores opened YTD, target 10–15 for the year. Strategic priorities remain: house‑of‑brands approach, continued Willys roll‑out (Willys 5.0), Hemköp expansion/refurbishment, City Gross turnaround, logistics efficiency (including electrifying 50% of transport fleet by 2030), sustainability initiatives and disciplined cost control. Outlook for the year is unchanged.