SwedenCare reported fourth-quarter figures that matched its recently issued profit warning, showing continued demand for its products but a notable deterioration in margins.
Net sales for the quarter came in at SEK 682.3 million, up 3% compared with the year-earlier period and representing 11% organic growth. The company said this performance reflected resilience across its main brands and distribution channels.
On profitability, operational EBITDA declined 25% year-over-year to SEK 108.6 million, producing an operational EBITDA margin of 15.9%, down from 22.0% in the same quarter a year earlier. Although this margin was at the upper bound of SwedenCare's preliminary guidance, it remains materially below historical levels.
Management attributed the quarterly profit squeeze to several temporary factors. These included higher Amazon marketing expenses tied to bringing the NaturVet account in-house, execution problems linked to an ERP implementation at NaturVet that affected fulfillment efficiency, inventory write-offs, and a low-margin display campaign executed across roughly 2,000 Walmart stores.
Segment performance was mixed. Dental products increased 13% to SEK 133.0 million, while Nutraceuticals grew 3% to SEK 319.5 million. The Pharma segment expanded rapidly, rising 59% to SEK 60.2 million, and Treats climbed 73% to SEK 20.6 million. Topicals/Dermatology was the weakest segment, declining 21% to SEK 119.4 million.
Operational EBIT fell 35% to SEK 80.7 million, with the operational EBIT margin sliding to 11.8% from 18.7% in Q4 2024.
Company leadership described the headwinds as largely temporary. They pointed to signs of improvement in January sell-through in Big Box retail, early signs of stabilization in Amazon economics, and an expectation that margins will gradually normalize over the course of 2026.
On the analyst front, Jefferies maintained a Buy rating on SwedenCare and set a price target of SEK 55, which the firm said represents potential upside of 139% relative to Wednesday's closing share price of SEK 23.05.
Bottom line - SwedenCare's quarter shows demand durability across core brands, but operational profitability was hit by a cluster of temporary marketing and execution costs that pushed margins well below prior-year levels. Management expects a gradual recovery in margin performance through 2026.