Strong sales growth and significant EBIT improvement

THE BEAUTY POWERHOUSE KEEPS GROWING STRONGER
For many years, we have invested in building a Lyko capable of becoming larger than it is today; in logistics, technology, stores and our brand platform. At times those investments have weighed on profitability. Now, together with the extensive work to make our operations more efficient, they are starting to pay off.

The third quarter marks a major leap in the right direction. Sales are developing positively, gross margin held at 41.5% and our cost base continues to decline according to plan. Together, these factors allow a greater share of our sales growth to translate into improved profitability.

A REFINED RECIPE FOR PROFITABLE GROWTH
Throughout the year, we have improved how we plan and execute our commercial activities, becoming more effective at driving sales while keeping a clear focus on profitability. As a result, sales performance in the third quarter was more in line with the second quarter, in which we prioritised margins over volume.
Gross margin will vary between quarters, and that is a natural part of our business. Competition, promotional intensity and the composition of our sales all play a part. A more favourable product and promotional mix strengthens profitability, while a less favourable one has the opposite effect. Our focus remains on strengthening the underlying business.

Our own brands continued to grow, reaching sales of SEK 117 m in the quarter, an increase of 10.7%, despite a high comparison base from last year’s viral campaign.
Our average order value also remains high, which lets us spread order processing and delivery costs across a higher sales value.

Leaner Organisation show impact
Our cost reduction programme continues to progress according to plan. The third quarter is the first in which the changes within our white-collar functions are having a more meaningful impact, and further effects are expected to materialise gradually over the coming quarters.
Combined with a more efficient organisation, this means additional sales now contribute more to earnings than they did in the past.

MORE LYKO, CLOSER TO MORE CUSTOMERS
We continue to expand our physical presence, with a long-term ambition of opening 100 new stores. On Black Friday we open in central Örebro. It will be our 37th store and the first in Lyko Store, a more compact format developed for city-centre locations.
 
Our stores strengthen our brand, increase visibility and help us reach new customers. Over time, we believe a larger store network can also make customer acquisition more efficient and reduce our need for paid marketing relative to sales. Our ambition is eight store investments next year. Since August, customers can also order from our stores via Wolt, with delivery within 30 minutes.

MADE FOR EVEN MORE LYKO
After a period of substantial investments and organisational changes, both sales and profitability are now stabilising. Competition and market conditions will continue to influence our performance, but we have established a stronger and leaner operational base to grow from. Continued sales growth, combined with ongoing improvements across logistics, technology and our commercial operations, gives us opportunities to strengthen profitability further.
 
We still have much work ahead of us. Our Christmas calendars have got off to a good start, and Black Month and the Christmas season, the busiest weeks of our year, are just around the corner. What makes me particularly optimistic is that many years of hard work are now showing up in our results.
 
Thank you all Lyko-fans!

Rickard Lyko, CEO and Founder, October 22, 2026