Axfood (OMX Stockholm – AXFO) released Q2 results last week. Overall the quater results is stable but bit weak, so the stock went down a bit. And I took the opportunity to add more.
Net sales increased by 0.9%.
Net profit for the period amounted to SEK 647 million (622) and earnings per share were SEK 2.94 (2.85).
Still quite weak from Axfood. Analysts expected 6% higher profit, just like previous quarters, and to reach over SEK 3 in profit, but even that was not achieved. I think the sales are bit disappointing.
City Gross reduced its sales by 4.4%, Willys is losing its margins from 4.5% to 4.2% (in 2022 they were over 5%). Hemköp is doing really well: sales are almost 10% higher and the operating margin has gone from 4.7% to 5.4%. Good!
However, Hemköp is a small part of the group. City Gross is going in the right direction, from a significant deficit last year to a proven turnaround quarter by quarter, but it is still a bit of a deficit in the second quarter. As the CEO said, City Gross will turn positive in the coming quarters.
I believe in Axfood delivering long term returns to us as investors. Also, due to the bad geo-political situations we are in, I feel safe to diversify more so added into consumer staples.
So the theme for now is ‘Ride the wave but Diversify’
*And please do your own due deligence (DD).
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