CEO's review

The CEO's review is updated quarterly in connection with the publication of the financial results. This review is from Verkkokauppa.com's interim report published on 24 October 2024.

CEO Panu Porkka:

The operating environment continued challenging in the third quarter. Consumer confidence was low, and customers continued to postpone purchasing decisions for discretionary products. The market was very price-driven and campaigning was intense.

Verkkokauppa.com's revenue for July–September totaled EUR 114.2 million (117.4), declining by 3 percent from the comparison period. Gross margin declined to 14.5 percent (15.9%). In addition to intense competition, the gross margin was weighed down by low-margin season sale especially by the negative gross margin for electric bikes. Given the continued cautiousness in demand, we took the necessary measures to improve our price competitiveness to ensure strong inventory turnover and liquidity. As a result of these actions, our market share strengthened* and the company's cash position developed favorably. The comparable operating result declined and was EUR -0.7 million (EUR 2.2 million).

With the ongoing targeted restructuring and streamlining of our organizational structure, we aim for profitable growth and are taking necessary steps for cost efficiency improvement. With the changes, we ensure sufficient resources for advancing strategic projects as well as the ability to utilize technology more extensively in the operations. With these measures, we strengthen our future competitiveness and are ready for profitable growth when the market recovers.

Despite the challenging market, our strategy is progressing according to plan. The popularity of express deliveries reached a new record level, and grew by 34 percent from the comparison period. Also, sales of our own brand products increased significantly during the quarter, amounting to 8 percent of sales (5%).

*GfK Consumer channel, July-September 2024 vs. 2023