Q4/FY 2025 - Puuilo
Continued growth, and confident messaging on the future prospects & consumer outlook
Today, Puuilo, one of the leading discount retailers in Finland, reported its Q4 and full-year results. As we speak, shares are up 9% following the announcement and earnings webcast.
Last October, we published an in-depth write-up to cover the essentials of the investment thesis: 1) above-average lease-adjusted ROIICs (some work to reconcile those but it’s crucial); 2) continued store openings with quick paybacks; 3) industry-leading comparable sales growth; 4) the ability to return a lot of cash to shareholders because of the aforementioned factors. Without high ROIICs and low growth, it’s tough to maintain such policy (as seen with Tokmanni).
Following today’s report, we judge that the forward return outlook remains healthy for patient quality growth investors - projected gross returns of >14% per annum, or a net 12% after dividend withholding taxes excluding any reinvestment. As we’ve raised our near-term sales and margin estimates, the undervaluation has in fact only gotten greater - resulting in shares trading at the most attractive risk/reward since the fall of 2024.