Verkkokauppa.com - Earnings miss in Q4

Verkkokauppa.com’s Q4’19 revenue grew by 3% and was EUR 159.9m vs. Evli EUR 168.9m and consensus of EUR 164.0m. Gross profit was EUR 22.2m (13.9% margin) vs. EUR 24.7m (14.6% margin) Evli view. EBIT was EUR 4.5m vs. EUR 6.0m/5.6m Evli/cons. 2020E guidance: The company expects revenue to be 510-530 million euros and comparable operating profit to be 12-15 million euros.

• Q4 revenue was EUR 159.9m vs. EUR 168.9m Evli view and EUR 164.0m consensus. Sales grew by 3% while market growth was 4.4% (GfK estimate). Revenue growth in Q4 was boosted by record sales during Black Friday, additional marketing activities and campaigning. Tax refund changes and Posti’s strike had a negative impact on sales during the Christmas season.

• Q4 gross profit was EUR 22.2m (13.9% margin) vs. EUR 24.7m (14.6% margin) Evli view. Gross profit weakened due to heavy campaigning during Black Friday.

• Q4 EBIT was EUR 4.5m (2.8% margin) vs. EUR 6.0m (3.6% margin) Evli view and EUR 5.6m (3.4% margin) consensus. EBIT decreased mostly due to a lower gross margin.

• Q4 eps was EUR 0.07 vs. EUR 0.10/0.09 Evli/cons.

• 2020 guidance: The company expects revenue to be 510-530 million euros and comparable operating profit to be 12-15 million euros.

• The company also decided on a quarterly dividend of EUR 0.048 per share. Total ’19 dividend is EUR 0.21 vs. our EUR 0.21 and EUR 0.21 consensus.

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