Solid sales, but slight margin contraction - Q3 initial

Pierce reported solid sales, but slightly weaker than expected earnings in Q3, with adj. EBIT coming in 6% below our estimate and 16% below Bloomberg consensus. Its sales grew 4% measured in local currency, which suggests a slight pick-up from the weak Q2, while its adj. EBIT margin fell 10bps Y/Y to 2.6% (2.7% in Q3 2025). Management said earnings were hampered by higher freight costs, price reductions and costs related to the transition to its new warehouse management system.

Decent sales, despite transitional challenges. Sales grew 6% Y/Y to SEK453m (SEK427m), which was >3% above our estimate and Bloomberg consensus. Its local-currency sales growth improved from 2% in Q2 to 4% in Q3. The Y/Y comparisons were very challenging, as sales grew 20% Y/Y in Q3 2025. We believe sales were hampered by temporary disruptions related to the migration of 10 of 16 e-commerce platforms during the quarter. We expect these challenges will likely prevail for another two quarters before sales pick up again from spring 2027.

Slight Y/Y margin contraction. The gross margin improved 210bps Y/Y, but adjusting for one-offs it fell 80bps Y/Y. After five consecutive quarters of strong improvement, the adj. EBIT margin fell 10bps Y/Y in Q3. This brought adj. EBIT to SEK12m (SEK11.4m), 6% below our estimate of SEK12.7m; Bloomberg consensus was at SEK14.3m.

Fair value of SEK12–16. We expect a slightly negative initial share price reaction to reflect lower than expected earnings. The share price collapsed in the year after Pierce’s 2021 IPO. It recovered somewhat in 2024–25, but has been volatile in 2026, hit by transitional investments that have slowed sales and earnings – we believe temporarily. We have a fair value range of SEK12–16 per share, based on the valuation of its Nordic online peers.

Webcast at 09:00 CET: https://events.inderes.com/pierce-group/q3-report-2026.