Swedish home-improvement retailer Rusta posted stronger first-quarter results for its fiscal year ending June 2027, with net sales rising 9.9% year-over-year and gross margin expanding sharply as the company continued to grow margins and free up cash.
Net sales grew 9.9%, equal to 8.7% organic growth and 2.2% like-for-like growth excluding currency effects. On a segment basis, Sweden saw net sales increase 6.6%, with like-for-like growth of 2.4%. Norway's net sales rose 7%, underpinned by 3.2% like-for-like growth. Other markets — which include Finland and Germany — posted net sales growth of 13.2%, though like-for-like growth there was just 0.7%.
Gross profit increased 14.5%, lifting the gross margin by 1.7 percentage points to 44.3%. EBITA rose 17.6% to SEK 330 million from SEK 280 million a year earlier, and the EBITA margin improved to 9.5% from 8.8%. Segment EBITA margins, before IFRS 16, were 21.4% in Sweden, 13.7% in Norway and 6.2% in other markets.
Operating cash flow jumped 60.7% to SEK 758 million, compared with SEK 472 million previously. Operating expenses fell to 32.9% of sales, down 0.3 percentage points. Net working capital declined to SEK 1,243 million, and Rusta ended the quarter with a net cash position of SEK 587 million.
Return on equity came in at 28% over the last twelve months. The company maintains a dividend-yield policy around 2.22% and has raised its payout for three consecutive years, with management saying it targets distributing 30% to 50% of net profit annually.
The company operates 248 stores across Sweden, Norway, Finland and Germany. Five new stores opened during the quarter in mature markets, and 14 are in the pipeline for the fall, with three signed locations set for Germany as part of a cluster strategy and the first slated for Q3. Rusta guided for 65 to 80 new stores over the next three years. Phase 2 of its Health & Beauty store concept renewal began rolling out in September 2026, following the Phase 1 launch in autumn 2025. A new ERP system implementation is underway, with total investment estimated at around SEK 80 million split between capital and operating expenditure, while central warehouse automation continues its ramp-up phase.
On its medium-term outlook, Rusta targeted average annual net sales growth of about 8%, like-for-like growth above 3% and an EBITA margin of roughly 8%. However, management warned that geopolitical uncertainty is expected to push up freight costs and the cost of goods by the end of Q2, with currency tailwinds expected to only partially mitigate the impact.
Rusta shares rose 3.02% to trade at $83.50, up $2.45 from the previous close of $81.05. The stock is about 47.2% above its 52-week low of $58.85 and roughly 20.3% below its 52-week high of $104.80.
