Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Synsam AB (OSTO:SYNSAM, Financial) reported a strong organic growth of 9.5% in the third quarter.
- The company has successfully increased its market share, particularly in Sweden and Finland.
- The rollout of the Synsam EyeView program is expected to increase optician capacity and improve customer accessibility.
- Synsam AB (OSTO:SYNSAM) is ahead of its store opening plan, with 32 stores opened year-to-date and plans for an additional 14 to 16 stores.
- The Lifestyle cash offering in Denmark has been positively received, contributing to a positive sales mix in the region.
Negative Points
- Consumer behavior has shifted towards lower-priced products, impacting the sales mix negatively in most countries except Denmark.
- The company is experiencing a higher churn rate in its subscription business, particularly in Denmark due to new consumer legislation.
- The rollout of Synsam EyeView has resulted in temporary double costs, affecting margins.
- The competitive optical retail market in the Nordics remains tough, impacting gross margins.
- Enhanced promotional activities have been necessary to attract customers, which has affected profitability.
Q & A Highlights
Q: Can you discuss the current consumer behavior trends and how they are impacting your business, particularly regarding premium product sales?
A: Jimmy Engstroem, Chief Commercial Officer: Consumer sentiment has been cautious, but there's a positive outlook with interest rates decreasing. Consumers are focusing on lower price points, and we've emphasized strong market campaigns to align with this trend.
Q: What factors contributed to the negative sales mix in all countries except Denmark?
A: Per Hedblom, Chief Financial Officer: The negative mix is due to consumers opting for lower-priced lenses, affecting the lens-frame combination. Denmark's positive mix is attributed to efforts to boost cash sales amid credit regulation impacts.
Q: How is the subscription business performing, and what are the implications of the increasing churn rate?
A: Jimmy Engstroem, Chief Commercial Officer: The subscription business continues to grow with stable churn rates, except in Denmark due to new consumer legislation. The offering remains popular, with 683,000 customers and 817,000 subscribers.
Q: Are you seeing intensified competition in the Nordic optical retail market, and how are your marketing campaigns affecting market share?
A: Per Hedblom, Chief Financial Officer: The market is competitive, but we've gained market share by attracting more customers through strategic offerings and campaigns, particularly in Sweden.
Q: With the economic downturn providing opportunities for store openings, are you pulling forward future plans, or is there potential for more openings beyond 2026?
A: Per Hedblom, Chief Financial Officer: The current store openings are a pull forward of our existing plan for 90 stores by 2026. We are focusing on smaller cities, which quickly reach profitability and offer good customer loyalty.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
