Nelly Group interim report for the second quarter of 2026

Q2 2026 – Financial highlights
Net revenue was SEK 346.3 (361.7) million, corresponding to a decline of -4.3% (15.1%)
Gross profit was SEK 184.1 (196.9) million, corresponding to a gross margin of 53.2% (54.5%)
Operating profit was SEK 32.3 (55.4) million, corresponding to an operating margin of 9.3% (15.3%)
Profit after tax was SEK 30.4 (52.4) million, corresponding to earnings per share of SEK 1.01 (1.75)
Cash flow from operating activities was SEK 99.0 (104.1) million
Cash and cash equivalents amounted to SEK 300.6 (259.6) million as at 30 June and external credit facilities were unutilised

H1 2026 – Financial highlights
Net revenue was SEK 589.5 (609.4) million, corresponding to a decline of -3.3% (13.6%)
Gross profit was SEK 318.6 (324.8) million, corresponding to a gross margin of 54.0% (53.3%)
Operating profit was SEK 40.3 (75.3) million, corresponding to an operating margin of 6.8% (12.4%)
Profit after tax was SEK 35.4 (68.8) million, corresponding to earnings per share of SEK 1.18 (2.29)
Cash flow from operating activities was SEK 72.4 (90.9) million

Material events during the quarter
No material events were reported during the quarter

Material events after end of quarter
No material events have been reported since the end of the quarter

CEO’s comments

A weak quarter, lacking precision
In the second quarter of 2026, we report net revenue decline of -4.3% (15.1%) and an operating margin of 9.3% (15.3%), which means that the weak trend from the first quarter persisted. We are not satisfied with this outcome.

Our assortment planning and buying ahead of the spring and summer season, particularly in the tops and dresses categories, lacked precision. This led to insufficient quantities of our best-selling products and a range that overall was not fashion-forward enough. Beyond this, we did not respond quickly enough to early positive signals from customers, and neither our positioning nor our brand expression fully reached the level we want to maintain.

In fashion, some buying decisions will always turn out to be less accurate than others, because first orders are placed long before the products are in season. A well-designed and well-executed business model, however, should be able to handle such situations with limited negative consequences, and without significant impact on overall financial performance. That is not the level we were at during the first half of the year.

That said, there are a number of positive trends that we will be building on during the second half of the year. Even in a weak second quarter, we strengthened NELLY's position across jeans, pants and knitwear, all categories that grew year-on-year. The share of sales from NELLY's own brands remained high at 64.1% (54.8%) and the return rate improved to 27.7% (28.4%), clear evidence that our deliberate work in these areas is paying off. The fact that we remain profitable even in a weak first half shows that the business rests on firmer foundations than before.

Deepening our work to strengthen NELLY
From a broader perspective, we see that the competitive landscape is changing rapidly. The players that will succeed in the medium and long term are likely to be those working in more innovative and agile ways, with creative processes closely coordinated with data, the supply chain and AI. The bar for precision in business model, positioning and brand is higher than before.

Against this background, the company has, over the spring and summer, initiated a deeper programme of work to strengthen NELLY. This work encompasses, among other things, positioning, brand, creative processes, buying, data, AI and supply chain. Management and the Board are working closely and intensively on these matters, and the Board has therefore organised itself into an Assortment Committee and a Strategy Committee.

Over the past few months, a number of significant changes have already been made, and we expect them to take effect gradually. Several more far-reaching improvements to our processes and positioning still lie ahead, however, and it is important to remember that our business runs on long cycles, which means that some of the effects of the work will come through in the shorter term and others in the longer term.

Looking ahead, we continue to see that NELLY's potential is substantial. With the right execution, we are well placed, in several markets, to become a unique destination for the most on-trend fashion. By combining our own brands with carefully selected external brands, we can create a truly curated customer offering with Stockholm and Scandi style as its point of departure.

In closing, I want to extend a warm and heartfelt thank you to all our customers who chose NELLY during the quarter, and to all my colleagues, whose commitment and hard work are essential as we now take the next step in the company's development.

Helena Karlinder-Östlundh,
CEO Nelly Group AB

Nelly Group AB (publ)
Box 690
501 13 Borås, Sweden
Corp. ID 556035-6940
Registered office: Borås
Visiting adress: Lundbygatan 1, Borås

Webcast on the interim report
Analysts, investors and the media are invited to a webcast presentation of Q2 on 15 July at 9 a.m. CEST. The presentation will be given in English by Helena Karlinder-Östlundh, CEO, and Josefin Dalum, CFO. The webcast will be made available on the Nelly Group website.

Link to webcast: https://nelly.videosync.fi/2026-07-15-q2
 
To listen to the presentation by phone, the following call-in details are available:
Finland: +358 9 4245 0972
Sweden: +46 8 525 07003
United Kingdom: +44 20 7043 5048
United States: +1 (774) 450-9900
 
Conference ID: 5009466#
User ID: 88735#