Sweden's Meko Q3 sales fall 2% as acceleration efforts have limited impact

Overview

• Sweden automotive parts distributor's Q3 net sales fell 2% yr/yr, organic growth at -3%

• Q3 revenue and adjusted EBIT missed analyst expectations

• Adjusted EBIT margin for Q3 held steady at 4.8% yr/yr

Outlook

• Meko says it is increasing efforts to accelerate organic growth and improve sales

• Company plans to expand product range and bring more workshops into its chains

• Meko will maintain strict cost control and financial discipline

Result Drivers

• REGIONAL VARIATION - Co said profitability improved in Poland and the Baltics, while Sweden and Denmark saw weaker results under challenging conditions

• COST CONTROL - Co said earlier investments in logistics and organizational changes helped contain costs and maintain profitability despite lower sales

• SALES INITIATIVES - Co said efforts to accelerate sales, such as expanding product range and e-commerce, have so far had limited impact

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the auto vehicles, parts & service retailers peer group is "buy."

• Wall Street's median 12-month price target for Meko AB is SEK87.00, about 20.7% above its November 11 closing price of SEK72.05

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 8 three months ago

Reuters Recommended Reads

• Nov 11 - Sweden's New Wave Q3 net sales rise to record

• Nov 10 - Switzerland's On Holding Q3 net sales rise 17%, slightly beat estimates

• Nov 11 - Tomb Raider owner Embracer reports Q2 core earnings above estimates

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)