What: Lindex Group reports improved Q4 2024 profitability despite challenging market conditions, with digital channels growing 14.9% while traditional retail faces headwinds.

Why it is important: The contrasting performance between digital and traditional channels underscores the urgent need for department stores to accelerate their digital transformation while optimizing physical operations.

Lindex Group's Q4 2024 results show resilient performance with adjusted operating result increasing to EUR 36.1 million from EUR 30.2 million, despite flat overall revenue at EUR 273.7 million. The Lindex division demonstrated strong digital growth of 14.9%, while the Stockmann division saw a 1.4% revenue decline in traditional retail. The Group's gross margin improved to 58.1%, supported by successful cost control measures. Digital channels now represent 18.9% of total revenue, with 8.7% growth in local currencies. Looking ahead to 2025, the company expects 0-4% revenue growth in local currencies and projects adjusted operating result between EUR 70-90 million, while acknowledging continued macroeconomic challenges. The strategic assessment of Stockmann department stores continues, with completion expected in first half of 2025.

IADS Notes: Lindex Group's Q4 2024 results demonstrate the diverging paths of digital transformation and traditional retail in challenging market conditions. The 14.9% revenue increase in Lindex's digital channels aligns with the division's continued growth trajectory identified in April 2024, while Stockmann's 1.4% revenue decrease reflects ongoing challenges in the traditional department store sector. This performance disparity has influenced the company's strategic direction, as evidenced by December 2024's announcement of an extended strategic review of the Stockmann department store business.

The results highlight how successful digital transformation can help offset broader market challenges, with the Group's digital share of revenue reaching 18.9% in Q4 2024, while traditional retail formats require more fundamental strategic reassessment.

Lindex Group reports improved Q4 2024 profitability