Nelly Group interim report for the third quarter of 2026

Q3 2026 – Financial highlights
• Net revenue was SEK 313.1 (283.7) million, corresponding to growth of 10.3% (18.4%)
• Gross profit was SEK 177.0 (161.2) million, corresponding to a gross margin of 56.5% (56.8%)
• Operating profit was SEK 42.4 (43.3) million, corresponding to an operating margin of 13.5% (15.3%)
• Profit after tax was SEK 30.6 (41.5) million, corresponding to earnings per share of SEK 1.02 (1.38)
• Cash flow from operating activities was SEK -30.1 (-18.5) million
• Cash and cash equivalents amounted to SEK 221.4 (226.7) million as at 30 September and external credit facilities were unutilised

9M 2026 – Financial highlights of the first nine months of the year
• Net revenue was SEK 902.6 (893.1) million, corresponding to growth of 1.1% (15.1%)
• Gross profit was SEK 495.6 (486.0) million, corresponding to a gross margin of 54.9% (54.4%)
• Operating profit was SEK 82.7 (118.6) million, corresponding to an operating margin of 9.2% (13.3%)
• Profit after tax was SEK 66.0 (110.3) million, corresponding to earnings per share of SEK 2.20 (3.68)
• Cash flow from operating activities was SEK 42.3 (72.3) million

Material events during the quarter
• Nelly Group AB (publ) (“Nelly”) operated a share repurchase programme during the quarter. It was introduced by the Board to optimise the company’s capital structure. The programme was initiated on 17 August 2026 and completed on 25 September 2026. In total, 836,000 shares were repurchased for an amount of SEK 30 million.
• On 5 August 2026, Nelly Group AB (publ) (”Nelly”) announced that Helena Karlinder-Östlundh informed the Board
of Directors of her decision to resign as CEO of Nelly to take on a new role outside the company. She will remain in
the role until a new CEO takes up the position, but will step down by 5 February 2027 at the latest.
• On 25 September 2026, Nelly Group AB (publ) (“Nelly”) announced that Josefin Dalum, CFO, has decided to leave the company to take on a new role outside the company. She will remain in her position during her six-month notice period.

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

A quarter of mixed performance and a continued focus on structural improvements
We maintained a disciplined approach throughout the third quarter, with carefully considered trade-offs supporting sales performance, even as the assortment continued to reflect the challenges encountered in the first half. Net revenue increased by 10.3% (18.4%) to SEK 313.1 (283.7) million, while gross margin decreased slightly to 56.5% (56.8%), mainly due to increased promotional activity. Operating profit amounted to SEK 42.4 (43.3) million, corresponding to an operating margin of 13.5% (15.3%). Work to further develop the business model, with a focus on assortment and positioning, continued during the quarter, although the effects are not yet evident in our results.

The autumn assortment converted better but required higher marketing spend and heavier discounting
The quarter began towards the end of the spring and summer season, with a well-executed sale that achieved good sell-through of the outgoing assortment. As we transitioned into the autumn and winter season, the assortment achieved a slightly higher conversion rate than in the first half. Pants grew year on year, driven by broader fashion trends as well as a strong product offering. Other important categories, such as knitwear and tops, also performed well, while sales of jeans remained in line with the previous year. NELLY’s own brands accounted for 66.9% (62.2%) of sales, and the return rate improved to 25.6% (26.1%). Both measures benefited from the category mix, which varies from quarter to quarter.

Although the number of active customers and orders increased, traffic in the Nordics fell, with a more pronounced decline in organic channels. Average order value exceeded last year’s level, although favourable currency effects contributed to the increase. Growth required deeper discounting and increased marketing investment, which meant that marketing costs as a share of net revenue rose to 10.0% (9.4%). Overall, the quarter demonstrates that the assortment was not yet sufficiently compelling on its own and that NELLY’s brand positioning needs to be sharpened.

At the same time, the company’s financial position remains robust and, in the third quarter, provided room for a SEK 30 million share share repurchase programme, which was completed on 25 September following the repurchase of 836,000 shares (2.7% of the total number of shares). The equity/assets ratio strengthened to 44.6% (35.7%) despite the programme and weaker earnings, reflecting the financial stability built up during the company’s previous transformation.

The next step towards greater precision and speed
The intensified work initiated in the spring to strengthen NELLY continued during the third quarter. Management and the Board worked closely together through the Assortment and Strategy Committees established earlier this year. Within the Assortment Committee, more structured ways of working were developed to systematically increase precision and fashion relevance in both buying decisions and creative expression. Processes were also established to identify trends earlier and translate them faster into the right assortment and stock depth. Early in the autumn and winter season, we saw tangible results of this work, including being able, with shorter lead times, to add trend colours to products already planned. The next step is a more integrated approach to supply chain development, alongside selective investments in supporting systems and data structures.

In September, NELLY’s head office moved to new premises in Gothenburg, and at the same time we introduced office-based working as the norm. These changes are part of our ongoing improvement efforts and are intended to strengthen cross-functional collaboration and further reduce the time between decisions and implementation.

It was also announced during the quarter that I will be stepping down as CEO and that the company’s CFO will be leaving. The search for our successors is under way. The strategy and transformation agenda have the firm support of both the Board and the management team, providing continuity throughout the transition.

We are now entering an important fourth quarter, with ongoing development efforts focused on the Nordic markets. We continue to refine NELLY’s brand positioning, supported by the opening of our third flagship store in Gothenburg this autumn. The targeted initiative in Germany also continues to receive a positive response. Profitable growth remains the North Star guiding everything we do.

Thank you to our fantastic customers and to all colleagues for your commitment and hard work. Our focus is now firmly on delivering results during a key trading period while continuing to drive the ongoing transformation agenda.

Helena Karlinder-Östlundh,
CEO Nelly Group AB

Nelly Group AB (publ)
Kämpegatan 10
411 04 Göteborg
Corp. ID 556035-6940
Registered office: Borås
Visiting adress: Kämpegatan 10, Göteborg

Webcast on the interim report
Analysts, investors and the media are invited to a webcast on Q3 on 22 October at 09:00 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 the webcast: https://nelly.videosync.fi/2026-10-22-q3

To listen to the presentation by phone, the following callin 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: 5002583#
User ID: 12897#