Embellence Group (EMBELL) Q1 2026 earnings summary

Executive summary

• Achieved 3% organic sales growth (currency-adjusted) in Q1 2026, with net sales at SEK 201 million, down 1% year-over-year due to a 4% negative FX impact.

• Strategic focus on direct-to-consumer (D2C), internationalization, and hospitality channels drove growth, with Boråstapeter, Pappelina, and Artscape showing strong performance.

• Cole & Son faced a 19% sales decline and management changes, with restructuring expected to impact results into Q2.

• Investments in digital platforms and consumer experience continued, with four out of five brands now on new platforms.

• High activity with new product launches and participation in major trade fairs across Europe and the US.

Financial highlights

• Net sales reached SEK 201 million, a 1% decrease year-over-year due to currency headwinds; organic growth was 3%.

• Gross margin improved to 62.8%, up from 62.0% last year, driven by D2C sales and product mix.

• EBITA margin declined to 14.0% from 16.0% last year, impacted by restructuring costs at Cole & Son and ongoing strategic investments.

• Operating cash flow increased to SEK 14 million from SEK 8 million in Q1 2025.

• Net profit fell 25% to SEK 18 million, with EPS at SEK 0.75 (1.00).

Outlook and guidance

• Continued focus on D2C, international expansion, and hospitality channel expected to drive future growth.

• Short-term sales and margin headwinds anticipated from Cole & Son restructuring, with transition effects expected to last into Q2.

• Inventory levels expected to normalize by Q3 after temporary buildup for supplier transition.

• Continued investments in e-commerce and international expansion planned.

• FX headwinds expected to moderate if current rates persist.