Boozt AB
STO:BOOZT
US |
Fubotv Inc
NYSE:FUBO
|
Media
|
|
US |
Bank of America Corp
NYSE:BAC
|
Banking
|
|
US |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
|
US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
US |
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
|
CN |
NIO Inc
NYSE:NIO
|
Automobiles
|
|
US |
Fluor Corp
NYSE:FLR
|
Construction
|
|
US |
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
|
US |
TopBuild Corp
NYSE:BLD
|
Consumer products
|
|
US |
Abbott Laboratories
NYSE:ABT
|
Health Care
|
|
US |
Chevron Corp
NYSE:CVX
|
Energy
|
|
US |
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
|
US |
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
|
US |
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
|
US |
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
|
US |
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
100.6
140.5
|
Price Target |
|
We'll email you a reminder when the closing price reaches SEK.
Choose the stock you wish to monitor with a price alert.
Fubotv Inc
NYSE:FUBO
|
US | |
Bank of America Corp
NYSE:BAC
|
US | |
Palantir Technologies Inc
NYSE:PLTR
|
US | |
C
|
C3.ai Inc
NYSE:AI
|
US |
Uber Technologies Inc
NYSE:UBER
|
US | |
NIO Inc
NYSE:NIO
|
CN | |
Fluor Corp
NYSE:FLR
|
US | |
Jacobs Engineering Group Inc
NYSE:J
|
US | |
TopBuild Corp
NYSE:BLD
|
US | |
Abbott Laboratories
NYSE:ABT
|
US | |
Chevron Corp
NYSE:CVX
|
US | |
Occidental Petroleum Corp
NYSE:OXY
|
US | |
Matrix Service Co
NASDAQ:MTRX
|
US | |
Automatic Data Processing Inc
NASDAQ:ADP
|
US | |
Qualcomm Inc
NASDAQ:QCOM
|
US | |
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Hello, and welcome to the Boozt Audiocast Teleconference Q3 2021. Today, I'm pleased to present CEO, Hermann Haraldsson; and CFO, Sandra Gadd. [Operator Instructions] Speakers, please begin your meeting.
Good morning, and welcome to our Q3 2021 webcast. Yes, I think we just should dive right into the first slide, the key highlights. And basically to start off with, I would like to say that our department store model is paying off. We can see that our categories are growing at a high pace. And we still are benefiting from a high basket size and lower return rates. And now with 9 strong months in the book and the fourth quarter performing as expected so far. I'm pleased that we can reconfirm or -- already upgraded our outlook for 2021. We grew 31.1% in the quarter compared to 2020. And on a 2-year stack, we grew 61.2%. Looking at our 2 business segments, Boozt.com, we delivered a very strong performance in Boozt.com with good momentum throughout the quarter. Booztlet was a bit on the soft side, mainly due to less availability of goods compared to last year. We still have very ambitious growth targets for Booztlet less, both for the Nordics as well as outside the Nordics. Had to carry that out, we are in the process of building the organizational capabilities as well as capacity to make sure that we have the right and enough resources. On the one hand, to secure stocks, but also to build a brand. So currently, this is one of our key focus areas as we believe Booztlet is a quite unique concept in very high demand. For the first 9 months, growth was also 31.1% compared to 2020. And on a 2-year stack, growth was 61.9%. We are very pleased with the level of profitability for the quarter. Adjusted EBIT margin was 2.0% in a quarter that is normally quite weak, usually, basically the weakest quarter. And for the first 9 months of the year, our profitability was in line with last year with a margin of 5.2%. Restrictions continues to impact the Nordic markets for most of the third quarter. But finally or luckily, you might say, all restrictions were moved or less lifted in our core markets by the end of September. So we expect a positive impact on the overall demand for fashion for the coming period. We have managed to avoid any significant or meaningful delays in delivery of the autumn-winter '21 season despite the ongoing challenges with supply chains worldwide. And I believe that we have positioned ourselves quite well for the rest of the year as well as for Q1 next year, with a very strong inventory position. And finally, we have increased our fulfillment capacity by some 40%. This will provide us with some much needed extra capacity to accommodate the usual peak in sales in connection with Black Friday and Christmas sales. At the same time, we've initiated the next expansion in automation, and we expect it to be operational during Q1 and Q2 next year. And this will effectively increase our capacity with more than 80% compared to Q2 this year. So basically, this is Phase 5, 6 and 7 in our store expansion. If we move on to the next slide, the most important one, I will say, the customer satisfaction. The customers are still very happy considering that we have quite a challenging quarter in our DC or distribution center due to the capacity constraints. We are quite pleased to see that we've been able to mitigate most issues and still deliver a very good service. We still have a 5-star rating on Trustpilot, even though the number is slightly down. This is good, and we will still work hard to maintain that customer rating. The NPS is -- has hit another all-time high. It's very high actually, probably higher than we should expect in the future. But to us, it means that we are able to live up to and even exceed our customers' expectations. So we are very happy for the customer satisfaction. Moving on to the next slide, the order development. We can see that we've increased the number of orders with 22% in the third quarter for Boozt.com, and on a 2-year stack, we are up 40%. Year-to-date, we're up 23% and 43% on a 2-year stack. For the market size or average order value, we are more than -- basically, extremely happy to see that we are on par for last year, both in the third quarter as well as year-to-date, and we're actually up in basket size compared to 2019. And as we always say, this is where the money is in e-commerce. So we believe that if we continue to execute on our department store strategy, we will continue to have a sustainable high basket size, which basically is a key to deliver the best in class at profitability. Moving to the next slide, the cohort development. As you can see, we continue to grow our base of active customers at Boozt.com. In the third quarter, we had 26% more active customers in the last 12 months compared to last year and 50% more than Q3 in 2019. At the same time, our number of orders per actual customers was slightly up compared to last year but still slightly down compared to 2019. This is basically as expected as people spend overall less on fashion apparel during the crisis, but many more bought online and probably for the first time. Our true frequency has recovered since last quarter, and we now are on par with previous year. It's good to see, actually, that the cohorts of 2020, which basically were forced online continue to behave in line with what we have seen from previous cohorts from previous years. And basically, this also tells us that it looks like that the change in buying habits during 18 months of corona, meaning higher online penetration will probably stick. And by the way, the graph excludes the fair-use customers, who I believe rightly should be named unfair-use customers or serial returners. So just to make that clear, so there's nothing fair about that. So with those words, I would like to hand over to Sandra for some perspectives on the financials for us.
Thank you. So if we look at the group results, we managed to grow net revenue with 31.1% in the quarter, as Hermann mentioned, growth in local currency was 32%. For the first 9 months, net revenue growth was 31.1%, while growth in local currencies was 34%. Return rates remained low during the third quarter and benefited from the continued diversification of sales. Compared to last year, the return rate was around 4 percentage points lower this year, both for the quarter as well as the year-to-date. Compared to the first 9 months in 2019, return rates are approximately 9 percentage points lower in 2021. For our biggest categories, the Women's and Men's categories, the growth rates increased throughout the quarter. Demand in these categories continue to be impacted by restrictions in North Nordic countries throughout the quarter. However, all restrictions were lifted towards end of September. The Kids, Sports, Beauty and Home categories continued the outstanding performance and delivered strong revenue growth throughout the quarter and further diversified our sales to the benefit of a lower sustainable return rate for the group. In the third quarter, we saw recovery in Finland and continued strong growth in Denmark and Norway. Year-to-date, Denmark and Norway are the strongest growing country. The gross margin came in strong at 40.4% in the third quarter, up almost 5 percentage points compared to 2019. Compared to 2020, it was roughly 2 percentage points lower, impacted negatively by the written down inventory that was sold partly during the third quarter last year as well as the extraordinary level of campaign buys in 2020. We had expected the Nordics to be without restrictions for most of the quarter. However, this did not materialize, making it an even more significant achievement that the sell through of the spring-summer inventory materialized according to our plan. Year-to-date, the gross margin is up 0.7 percentage points compared to 2020 and around 2 percentage points compared to 2019. We expect the gross margin to be on par with the 39% to 40% for the full year as we have previously communicated. The adjusted EBIT margin was 2% in the quarter, a decrease of 5. 4 percentage points compared to last year. Historically, the third quarter is a weak quarter from a profitability perspective with exception for the extraordinary 2020. Compared to 2019, this year's 2% is an improvement of 5.6 percentage points. For the first 9 months, the adjusted EBIT margin was 5%, which is on par with last year. Excluding the effect from the IFRS revaluation of a lease contract last year, the adjusted EBIT margin was 0.3 percentage points lower than last year. If we're able to deliver profitability around the same level of last year despite our increased investments in marketing and staff is a strong testament to the sustainability of our business model and put us in a very good position to meet the ambition of a significantly outgrowing the online Nordic market. If we move to the next page. We can see that the revenue growth for Boozt.com was 29.6% in the third quarter compared to 2020 and 49% compared to 2019. Negative impact from FX was around 1 percentage point in the quarter. We're pleased to see that the true frequency was on level with previous years and the fact that the 2020 cohort continues to behave as previous cohorts. Average order value was on par with last year at SEK 807 and slightly increased compared to 2019. The continued execution of our department store strategy with a higher share of Kids, Sports, Beauty and Home continues to result in lower return rates, which has a positive impact on the average order value. This continues to be partly offset by less sales in a location were categories where items typically have a higher average pricing. For the first 9 months, the average order value was on par with last year. With all restrictions lifted in the Nordics by the end of September, we are optimistic for the fourth quarter, and we have secured a confident inventory position for the AB '21 season. So moving on to the next page. We see the Booztlet grew 39% during the quarter and 40% in local currencies. During the first 9 months of 2020, Booztlet performed exceptionally well and had access to low-value stock after we have performed the extraordinary write-down in March of 2020. In addition, Booztlet had high availability of campaign stock due to the lockdown situation. Measuring on a 2-year stack, we have managed to deliver growth of 233% compared to the first 9 months of 2019, amounting to a compounded annual growth rate of more than 80%. Growth in the Nordics was 31% in the quarter, mainly driven by Sweden and Norway, while Rest of Europe grew 193% in the third quarter.Average order value increased significantly to SEK 704, an increase of 7.2% compared to last year with consumers putting more items in each basket. Year-to-date, the average order value is slightly higher than last year, a level that we're very satisfied with as it enables a strong foundation for profitability. The adjusted EBIT margin was a negative 0.6% in the quarter and a positive 4.8% for the first 9 months. The third quarter was impacted by increased investments into offline marketing to further build the Booztlet brand as well as strengthening the organizational setup. So if we move on to the next page, we see the development in the cost ratios for the third quarter. The fulfillment cost ratio was 12.2%, which is an increase of 0.7 percentage points in the quarter. During the third quarter, our operations were running at more than full capacity in relation to storage, which impacted the cost ratio negatively due to the need of additional workforce to handle more processes manually. The tight capacity situation was partly offset by lower cost per hour for personnel working in the fulfillment center, along with lower return rates. The lower cost per hour for personnel is an effect from the in-sourcing of personnel in January '21. Our personnel in the [ BFC ] previously worked for a third-party provider. Year-to-date, fulfillment costs decreased with 0.3 percentage points to 11.6%. The improvement is mainly related to relatively lower distribution cost while fulfillment costs were slightly higher than last year. The recent expansion of more than 40% of our automated storage and good-to-person solution will provide the capacity we need to handle the upcoming peak season. And the next phase of the expansion in the first half of next year will provide headroom for further growth in line with our expectations. The marketing cost ratio was 12% for the third quarter and 10.7% for the first 9 months. The increase is related to offline marketing to further strengthening our efforts to become a Nordic household brand. Online marketing spend was on par with last year's spend as a percentage of revenue. Historically, our marketing ratio has been around 10% on a full year basis, and this is also the expected level for the immediate future. The adjusted admin and other cost ratio increased to 1.5 percentage points in the quarter to 10.7%. Of this increase, 0.8 percentage points is related to investments in new employees as we're building our organization to support further growth. In addition, we have some negative effects from FX and some one-off costs in relation to the acquisition, which has impacted this quarter negatively. For the first 9 months, the adjusted admin and other cost ratio was 9.8%, an increase of 0.3 percentage points. The continued investments in personnel during 2021 impacted the cost ratio negatively with 0.5 percentage points. Our ambition to grow at a high pace and take market share requires us to continuously invest in people. As we continue to grow, we expect to gain scale advantage and thereby leverage on these investments.The adjusted depreciation cost ratio increased with 0.2 percentage points to 3.5% in the quarter, but decreased from 3.2% to 3.1% for the first 9 months of the year. As we will continue to invest to secure more capacity in our fulfillment center, we expect this ratio to increase at the current growth rates, and we estimate that the ratio should be around 3% to 3.5% on a full year basis. So moving on to the next slide. We see that the net working capital increased from the historically low 0.3% to 9.7% of last 12 months net revenue. The increase compared to last year is strongly impacted by the situation where campaign inventory constituted a relatively higher share of the revenue to compensate for the low inventory levels last year.What also needs to be put into consideration is the overall delay that we, as well as others, are experiencing in our supply chain that made it the larger upfront investment in inventory in the fourth quarter of '21 as well as for the first quarter of '22 to secure stock for continued high growth coming into next year.Compared to 2019, the ratio is down 1.5 percentage points, and this benchmark is also more relevant due to the relative size of upfront buys ahead of the AB season. We believe that the current level is healthy given our focus to hold a strong and attractive selection of inventory for our customers and the ability to continue to grow at high rates.Moving on to CapEx, the total $191 million in the quarter, where $20.5 million is related to intangible development costs. The level of intangible development CapEx was slightly higher in the third quarter compared to the previous quarters as we continue to invest in our own developed infrastructure to support the rapid growth and continued ability to scale. Investments in warehouse automation of $170.3 million is related to the continued expansion of AutoStore and surrounding facilities to strengthen productivity.AutoStore Phase 5 and 6 was installed during the quarter and became partly operational by end of September with the remaining capacity going live in October. We have successfully pushed forward additional investments in AutoStore to secure an additional capacity increase of 40% compared to end of Q2 2021, effectively increasing our automated fulfillment capacity with 80% in combination with the recently installed Phase 5 and 6. As we communicated last quarter, this will have an impact on our CapEx in 2021. And we, at that point, said that, that effect could be around SEK 200 million. Our current assessment is that part of this will impact 2021, but that depends very much on the timing of the construction, which is currently difficult to predict due to the ongoing supply chain shortages. Total CapEx will likely be between SEK 400 million and SEK 500 million this year, depending on the timing of the construction. From an operational point of view, this is to secure capacity for 2022 and 2023. To secure availability, we need to, from a financial point, commit an upfront payment that is significantly higher than with previous AutoStore build out phases. So even though this build out would be operational first -- in the first half of next year, CapEx will be affected already in 2021. This will reduce CapEx for next year correspondingly. The operational cash flow for the third quarter was a negative SEK 81.5 million, that is to be compared to a positive SEK 160.2 million last year, highly impacted by the changes in net working capital. The outflow is mainly due to intensive stock building that has secured as a constant inventory position for the fourth quarter of '21 and first quarter of '22 in order to support our growth ambition. And this concludes the financial update. And I would now like to hand back to Hermann.
Thank you, Sandra. And if we go more to the next side and kind of here, at the end, I would like to take the opportunity to share our status on what was our key ambition when we launched Boozt.com 10 years ago. So from day 1, the goal was to create the modern Nordics department store. It would be an online version of the classical department store. We all know, and -- that some of us really, really loved back there, curated as before, but not limited by any physical constraints, locations or geographies. And this is why we have large categories like Kids, Sports, Beauty and Home alongside the Women's and the Men's categories. And that -- this is also why we believe that we have quite a good hedge towards changes in consumer behavior changes as we have seen over the last 18 months. If you take occasion wear, as an example, both women and men have been buying much less occasion wear during the last 18 months during the crisis. But what we can see is that it's not been as hardly hit as we've been able to sell much more Kids, Sports, Beauty and Home. And this is the reason why we have accelerated our growth. And this is also why we have a higher profitability than most, if not all of our peers. So we are not there yet, that's important to say. But I believe that we've laid a very strong foundation. So I'm quite confident that we now have categories that are becoming destinations in their own rights. And why is this important, you might ask? Well, it's because it provides a unique potential for value creation. We believe, actually, that the evidence is quite clear. with our basket size being best-in-class, along with superior unit economics. And last but not least, it actually increases our addressable market. We still have a lot to do but we've taken some important steps in the right direction. So we will continue to develop our business model further, but with the same ambition as always. So if we go to the next slide, the last one, our outlook. As we have continued to deliver in line with our upgraded expectations, upgraded from August, we are pleased that we can reconfirm the outlook for 2021. When we set out for 2021, we expect a growth between 20% and 25%. In August, we saw that we were ahead of our expectations. So we upgraded our revenue guidance quite a bit. So this is still the case. We are still ahead of the expectations set by the beginning of the year. So I'm very happy to reconfirm our 27.5% to 32.5% growth guidance. So this means, in pure numbers, that we expect to deliver between SEK 1.2 billion and SEK 1.4 billion more in net revenue than last year. We can also reconfirm the already upgraded outlook for the adjusted EBIT margin with an expected margin of above 5% for the full year. And as before, our medium-term financial ambitions remained unchanged. So this concludes our presentation, and I would now like to hand over to the operator to get the Q&A session going. Thank you.
[Operator Instructions] Our first question comes from the line of Daniel Schmidt from Danske Bank.
A couple of questions from my side. Starting with the warehouse and you state in the report and also in your presentation that you made great progress when it came to the capacity expansion as of late in September and in October. As I get it, you've added 200,000 bins. And of course, you had some difficulties during the quarter when it comes to delay-ments and handling costs and as you mentioned, more personnel and so on. Should we then expect fulfillment costs to come back down again as a percentage of sales in the coming quarter and into 2022?
Yes, that's a good question. And as you said, we are running tight with capacity and are expanding and continue to expand also during 2022 with, actually, Phase 7 ongoing. Of course, over time, we expect fulfillment costs to come down. But again, we are still growing considerably faster than we expected 1 year ago and 2 years ago. So we are -- we have stabilized the cost, our organic costs, so we expect it to go down. But I think it would be a bit, maybe to a business, to expect huge improvements in fulfillment costs going forward because we are -- it's a catch-up game with sales revenue growing fast and trying to basically get bins, aluminum and robots ready for now. So I'm quite confident the situation's stabilized and improving, but seeing significant declines in fulfillment costs. Don't expect it over the next 6 months.
If I may add, I think all the -- since we're running this very big AutoStore solution and it's the biggest one that there's out there, and we're also operating with new categories and stuff, we're really -- we need to have a room to test things and make sure how can we run this in the most efficient way long term. So we allow ourselves to test things and that has some implications on manual costs sometimes. But we need to build a set up that is, long term, very efficient. So we prioritize that instead of lowering fulfillment cost in a separate quarter. But as Hermann said, looking longer ahead, this is what our expectations are. And it should be around 11%, 12% -- to 12%.
For the full year, yes. All right. So you're saying that even though you've been installed these bins, you're still sort of running with extra personnel because you want to get it right, given that you're entering the peak season, and you want to be on the safe side.
You have to be ahead of the curve. And our congestion has come slightly at the expense of delivery speed and you just can't sacrifice customer satisfaction. So we would rather overinvest short term in the warehouse capacity to make sure that we can live up to our promise of being the fastest kids -- fastest ones delivering in the retail. So we are not -- we would rather like to be on the safe side, but we are very confident that we will kind have our target of 11% to 12% ratio. So that's definitely going to be the case.
Yes. Okay. And then you said that -- at the start of the call, you said that Q4 is performing according to plan. And if you look at sort of this great data from the web, it looks like site visits picked up quite a bit in October versus a quite poor September. Is that rhyming with your view sort of going into the last part of this year?
Daniel, it's -- basically, everything is decided on Black Friday and Christmas sales. So it doesn't really make sense to start and talk about current trading because basically, on this -- so basically, it's Black Friday, so it's going to -- according to plan. We've maintained the guidance but we're still awaiting the Black Friday to see if we can -- have it finished, so we really don't have any opinion on current trading because it's -- everything is decided over the next 4 weeks.
Okay. I don't know if you look at competitors a lot, I know that, but we did hear sort of Zalando mentioning that they had a slow September, and then they you had a quite sort of a good recovery in October. And -- but you don't want to confirm that. You're basically saying it all depends on the end of November.
I think kind of -- we really would hate to kind of to comment on individual months because everything depends, it could be timing, it could be season, it could be well -- et cetera. So basically, things are going according to plan. We are quite confident that we will deliver on our guidance. And looking forward to the next 4 weeks as we are in a very good shape with a lot of inventory in a strong position. The category is strong so we are confident, but it's -- I think it's a bit silly if we talk about...
Okay. Yes, yes, but I hear you. That's fine. Then last question then moving on to Booztlet. And you're saying that you're building the organization for the future, of course, and you also had quite a bit of an increase in off-line marketing in this quarter. I guess, building the organization, you don't do in a quarter and that's going to take maybe probably longer. But should we expect the off-line marketing to stay elevated as well in the last part of this year into 2022?
Yes. Yes. We want to invest in the brand because it's an extremely strong proposition. We have -- they've got a lot of tailwinds from COVID last year. Boozt were asked if they could participate, Boozt campaigns, et cetera. Now Boozt needs to kind of more live on their own. We need to build the brand. We need to get access to inventory. So we will continue to push Boozt. I think that already now, it's by far the biggest outlet in the Nordics in our categories, and we want to keep on expanding that and also outside the Nordics. So we will continue to invest.
Yes. And 2 very short ones as well. You mentioned transaction costs in the quarter for Rosemunde. How much was that? And then secondly, if we get CapEx close to sort of $400 million to $500 million this year, do you have any guesstimate for next year?
Okay. So we start we'll start with Rosemunde. We have said that it will be around 1 percentage point of the revenue for the full year, and that implies, as we have them for half a year, it implies approximately 0% for the third and the fourth quarter. And that's kind of the case. And then looking at CapEx, no, we don't have an estimate for next year at this point. It is very much a game where we need to know when the timing of supply and aluminum and all of that. So we need to know how much earlier do we need to secure this capacity. It's changed quite a lot over the last year. So we need to come back to this. And that's also why it is hard. You should think that it's quite easy to predict the rest of the year, but it really is the timing between December and January here. So we need to come back on 2022.
Yes. I think you got me wrong in there in Rosemunde. I think you said you had transaction costs for the acquisition in the quarter and how much of that...
Okay. Sorry. SEK 2 million, approximately SEK 2 million.
Okay. And you also said the CapEx will be reduced next year, but you don't know how much basically.
Yes. But it's more like if we take something in 2021, it obviously won't come in 2022. But then -- so it's more plus and minus like that.
And the next question comes from the line of Niklas Ekman from Carnegie.
A couple of questions. And firstly, if we can talk a little bit about pent-up demand that you mentioned here in the report. You talk about how pent-up demand was delayed. You expect it to materialize. And at the same time, you say that -- you confirm that the restrictions eased towards the end of September. So wouldn't that mean that the pent-up demand would likely have started to materialize already in October?
That's a fair assumption, Niklas, but I try to get away from commenting different ones. So you won't get a comment on that. But of course, we can see that, for instance, occasion wear in women is increasing. So women start buying again. Men, holding a bit back, because we only buy when it gets cold. So -- but of course, we're expecting the quarter to get back to normal, people socializing. So there's nothing changed. The only thing is that kind of the pent-up demand, obviously, is slightly later than we expected. But we are -- yes, as for the company going into Q4 and maintain a guidance that has quite a high growth compared to last year. So that's -- that's my best answer, Niklas.
Yes. Yes. Fair enough. And on that topic, you talked about having a full supply and being fully stocked. And at the same time, this demand has come stronger than expected. Is there a risk that you have a little too much occasional wear. And I assume that occasional aware is also products that have maybe a shorter life cycle compared to other product categories. So is there any risk that you will have too much inventory going into the season now?
Yes. Starting with kind of your last comment is that the good thing is that we are in the mid- to premium segment. So our -- the items are typically a much like last time than the cheaper fast fashion items, which is also why people are selling them on [ reboost ].But I think our stock position is good. Our sell-through is on par with '17, '18 and '19. 2020, last year, was characterized by, basically, that we had too little stock at the end of the quarter. So I think that we're in a good position. We are not more concerned than before that we have too much stock. So I think we're in quite a good spot at the moment.
Very good. And also, I'm curious about your margin target. You're reiterating the guidance here by a margin of at least 5.5%. But for you to reach a 5.5% margin, your Q4 margin would have to drop 3 percentage points relative, not only to Q4 of last year, but also to 2019. And in Q3 now, your margins improved quite a bit. So I'm just wondering, I recognize that there's a lot of uncertainties here surrounding Black Friday and Christmas. But is there any reason to assume margin contraction in Q4 versus 2019?
I think that -- I think kind of the reason why is -- the uncertainties, let's talk about. You don't know what's happening. We're still getting out of corona with -- we don't know kind of how is the supply versus demand. At the same time, as we're investing, we're investing a lot in Booztlet. We're investing in Boozt.com, investing in staff. I would say that we have been under investment all around the company during the last 18 months, because we were taken by surprise with the growth. So we need to get back on track and invest for the growth which we'll take ahead. So we have actually no ambitions of getting close to 6% or 7% in EBITDA margin because that would be foolish because that would come at the expense of growth. So that's why I would rather spend more in marketing in both Boozt and Booztlet in the quarter than putting on the EBITDA because this is where the money is, long term.
That's a very, very fair point. And also curious on private label. I noticed that you have launched, I think, it's slippers under the Little B, Inc. and the brand names, which are your new private label brands. I assume you're looking at expanding this assortment going forward. Can you elaborate a bit here on your private label plans?
Yes. This is -- when we bought Rosemunde, that was -- kind of the target was to get some competencies to be able to kind of introduce some home brands. And [ Aigle ] and Little B are stars. So this is kind of typical to us, being on the safe side. Also, it's -- there is always kind of lead time. So it's probably the slippage is for the ones that have been let's produce the fastest and quite complementary to what we've been doing with Rosemunde. So this kind of -- this is a start. In the process of building -- set up a small organization for our own brands, but don't expect it to be a huge part of our business in the near future. It's kind of -- we are, as we said, different talks. Rosemunde has been, as we've seen, as good as we had hoped. So it's been a promising start. But we're in -- it's very early days.
And the next question comes from the line of Magnus Jensen from SEB.
A couple of questions from my side. The first one goes to sort of the expectation of a pent-up demand coming through. How will this be impacted if -- I mean it seems like in Denmark, we're about to reinstall the corona passport and maybe also other restrictions. How would that sort of impact your expectations in Denmark going into Q4?
That's a good question, actually. I don't really know that. It's kind of a soft measure if you ask me. It's not a big disruptions to have to show a pass that you're vaccinated or something. So personally, I don't believe it will have a lot of impact on people's social behavior, at not least with the kind of -- if you talk about private parties, et cetera. Of course, if you have increased restricted lockdowns, it can go both ways. It can favor us because then, people have to do Christmas shopping, Black Friday shopping online. And if anything, I would say that if you have more concerns about the disease, you are probably more inclined to buy from home during Black Friday, avoiding large crowds than the reverse. So if anything, it might be slightly positive, but I actually don't think it's going to have any impact, if you ask me.
Okay. Makes sense. And then a question to Q3. I remember you saying at your last conference call that you ended the quarter at sort of around 40% growth. But nevertheless, you would end up reporting around 30% growth for Boozt.com. Has there been a slowdown through the quarter? Anything worth noting on this development throughout the quarter?
I think the main reason is that the comps for July last year were quite easy. July last year, we basically have run out of stock, so that's the thing. We haven't kind of -- the quarter has actually progressed as we expected. So that's why it doesn't really make sense to talk about neither acceleration or slowdown. It's been a relatively smooth line if you're asking. Also, normally, we talk about Q3 being the most boring quarter because nothing really happens. So -- and that's apart from our kind of our work in the warehouse, trying to get kind of the robots installed. That has kind of been the biggest thing in the world, however, it's been going according to the plan.
Okay. And then another one to Q3. So in Q3 -- sorry, in Q2, you talked about sort of almost being too busy and not being able to, maybe, fully deliver in terms of demand. Has that had any impact on the third quarter?
Can you say the again, please?
Yes. So in the first half of the year, you talked about being extremely busy and the warehouse really working up to -- at 100% and not being able to meet all orders. Has that been an issue in Q3?
Yes. But that was actually the main issue, because we have to run out of capacity in Q2 in the warehouse. So we were supposed to have automation installed before start of summer, but due to delays, it was delayed in installations. So this is what we've been frantically working on, because it's like -- it's been busy. It hasn't meant that we have been kind of holding back on orders or have lost sales, I believe. But it just meant that our deliveries were slightly slower than we would like them to be.
Okay. That's clear. And then just a final one. You talked about your -- sort of your other categories, Kids, Sports and Beauty and Home doing pretty well. Could you say how much those categories represent today in terms of revenue and maybe comment on the growth rates for them?
Yes. We don't want to disclose the categories because we want to keep it kind of our private thing for the moment. But I think kind of the best indicator is that the women's category's share of our total business is now in the mid-40s. And 2, 3 years ago, it was, I think in the 60s. So I think that's kind of the best example of what a big system is. And taking in consideration that the Home category was launched 1 year ago, approximately. Purely, we did a lot of mistakes in the beginning, but are now on a really, really good track. And then just Kids and Sports -- from our understanding, so I think that kind of -- kind of that is a good proof that our department store strategy where we haven't been so vocal about the department store, because it hasn't been so kind of -- properly talk about it, but it actually -- people are embracing it with us doing this curated thing and [ priding ] ourselves. So I think kind of the categories have been amazing. And I think that's why we are growing more than most of the other inventory-taking businesses in our industry.
The next question comes from the line of Peter Testa from One Investments.
Just following on from the point on the new categories. You gave a sense that there's a better return profile because of the nature of the categories. But I was wondering if you could give any sort of sense looking at your KPI slide, Slide 5. If you look at the source of active customers, are they increasingly being sourced from these categories? Or are those categories basically being -- going back to your existing customers and increasing frequency, just to try to understand how they bring in some of the other metrics, please?
Yes. Basically, it's -- the new customers we're getting are very close, are very similar to the old ones, and we are still recruiting a lot of new customers for both accounts. The good thing is that our customers are embracing the new categories as before. I think there are some 67% of our Beauty baskets are combined, Beauty and Fashion baskets. For home, the number is around 60%. So meaning that it's the current customer center. Of course, our best customers are the ones buying across all categories. I would say that it isn't until now that we are getting confident that our categories are becoming destinations in their own right. Meaning that you will be able to recruit directly through the categories. I think that kind of up until this year, at least, and now it has been that kind of our people have come here for the Fashion and the Beauty. But during corona, they have increasingly being recruited, because they were buying into the Sports or the Kids kind of, and then discovered Beauty and Home, so. But I think it's a bit to say that Home and Beauty are destinations where we recruit customers for the rest. So I think that's likely. But that's, of course, the target all the time, and we're quite confident that we'll get there.
Okay. And then sort of related to that, on the investment side, I mean, when you look at the fulfillment investments and also some of the personnel investment, to what extent do they sort of -- are they behind broadening the skill bases here or managing complexity that the different shapes and sizes of the product categories might bring.
It's a combination, both for the Home category and the Beauty category. Of course, we have start up. It's actually not so much because of complication, because it's not that complicated. It's more that we have needed to have buyers and actually also category and marketing people. So I think that's kind of small in the commercial side that we've been under-investing. And of course, in the warehouse, adding Home adds, obviously, more complexity, but still, some 85% of our stock is in the old store and 50% is outside. So it does not -- so it doesn't have that big impact. But obviously, of course, we have to kind of realign the distribution center for the bulky items, which is, of course, challenging, but we would rather launch the category and then fix it rather than wait for it to be perfect. But -- so I think it's more kind of to accelerate our commercial part. We're doing it with not so much complexity.
Okay. And last question, it's just within the geographies. You talked a bit about the different non-recovering in Norway, Denmark. I was wondering if you could just give some comments, please, on Sweden in terms of how that's performing relative vis-a-vis things like active customers and maybe revenue and order, just some of the metrics. Any comments you can give around Sweden, please?
Yes. As we've said before, Denmark was the country coming kind of fastest out of corona, which is probably because in Denmark, restrictions were eased quite fast. Sweden never really did enter any real lockdown. So it was more kind of depressed, but I think it's performed quite strongly over the last 2 months. So Sweden is kicking back hardly. And then, of course, also in Finland. So I think that kind of all Nordic countries are running on all cylinders, if you can say so.
And the next question comes from the line of [ Nicholas Goodman ] from Handelsbanken.
If we look at your net income, I see that, basically, all the profit is attributable to noncontrolling interest. So I was just wondering what's the impact from -- is there acquisitions, I guess? And what was the impact from acquisition on adjusted EBIT in the quarter?
Well, as we -- as I wrongly said before when I answered the wrong question, but Rosemunde is supposed to -- we expect that it contributes to 1% of the revenue growth for the full year and their EBIT margin is between 20% and 25%, and that remains still. So we don't comment on it specifically on each quarter, but of course, the third quarter is a little stronger than the fourth quarter for that type of business. So I think you can do the math.
Yes. Perfect. And then secondly, you talked about returns level still being low, but we've seen other players in Europe talking about return rates normalizing as societies have reopened. Do you expect that to happen now in Q4 and moving forward? And have you already started to see any impact from the sales mix and customer behavior normalizing?
We have seen the difference in the sales mix, of course. So once the women come back, the -- and we sell more dresses, of course, the return rate increases slightly. But the diversification that we've done with the department store strategy is kind of overweighing that. So yes, we do expect the return rate to come up slightly, but as the categories continue to grow, we expect that to continue. So I think -- and then in addition, we have -- it's really hard to compare to 2019. And compared to 2019, the return rates are around 9 percentage points lower. And that, of course, has to do with the product mix. It also has to do with our fair use policy. It has to use -- it has to do with the continuous work that we do with the returns all the time with the pictures. Last year, we focused a lot on getting brand pictures, in addition to the pictures we take ourselves with the product description. It's really hard to address how much that is. It's all these small changes that we do all the time. But we do a lot of work on the returns, and we believe that we won't come back to the levels that we were pre-COVID, but might increase slightly compared to now.
Okay. Final question is on -- if you would compare your access to campaign goods, I mean, I know it was lower this year than last year. But if you would compare them to 2019, is your access to this campaign goods, is it still above pre-pandemic levels now? Or was it still above in Q3?
Yes, it's still above pre-COVID levels. And that's because basically our risk and clout in the market. We are the biggest customers of the Nordic fashion events. So we have significantly more access to campaign buys than we had pre-COVID.
Okay. But you don't want to attribute any of the extra access to fashion retail market overall still being slightly weaker than prepandemic?
I'm not sure I understand your question.
You said you still have plenty of access to campaign goods. So I was just wondering how much of that do you think is due to the fashion market still probably being impacted by COVID.
No, I believe I said that we had more access than in 2019. It was less in 2020. So the market, in general, seems to be kind of normalizing. But just due to our CSIs and clout in the market and being a strong partner with all the brands, of course, we are the first ones they call if they have access in, I'm not saying there was, perhaps not the case in '18 and '19. So with regards to kind of the stock position in our campaign goods, it's just I think that because we are just a good partner that we're getting better access than we did pre-COVID.
And we have just one follow-up from Daniel Schmidt from Danske Bank.
Yes. We touched upon it in the previous question, but just coming back to return rates. And Sandra, is there any way you can quantify the 9 percentage points? And if you want to split that up between product mix, gender mix and fair usage policy? Or put it this way, how much has been attributed to fair usage policy being introduced?
Yes. Fair use is around 1% to 2%. But the rest of the split, I actually think that we want to keep for ourselves.
It's really the categories.
Yes, the category mix is...
If we did, of course, as much as the old times, and management, yes.
It if you look at the fair usage policy implementation, have you enlarged it even further, expanded it in terms of customers that are not able to continue shopping with you compared to the start of this year?
Not -- it's more the small changes. We review how we assess this. We look at customer behaviors. We learn things all the time, but we haven't made any, like, big changes in it. So it's kind of the same, I would say, in principle, but of course, we learn along the way.
And there no further audio questions, I'll hand it back to the speakers.
Okay. Thank you, Pierre. Basically, this concludes our session of today. So thank you very much. Very good questions, and I look forward to meeting all of you in weeks. Thank you.
This concludes our conference call. Thank you all for attending. You may now disconnect your lines.