Welcome to the Boozt Q2 2023 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing star five on their telephone keypad. Now, I will hand the conference over to the speakers, CEO Hermann Haraldsson and CFO Sandra Gadd. Please go ahead.
Thank you. Good morning, everyone, and welcome to our Q2 Webcast 2023. Let's just jump right into it and go to our first key highlight. Basically, our Nordic department store strategy continued to demonstrate its strengths in the quarter as we grew 8.6% in a market that was quite depressed.
This is to a large degree, driven by the migration from single category to Multi-category customers, and this is exactly what we are aiming for. Even though the market was characterized by very high promotional activity due to peers offsetting too high inventory levels, we actually managed to increase our gross margin due to a very well-balanced inventory mix, supported by campaign buys.
The higher gross margin compensated for an increased inflationary pressure, enabling us to deliver an Adjusted EBIT level of 5.1% and more or less on par with last year. The underlying business drivers continued, all point in the right direction. Average order value for Boozt.com continues to increase, driven by more items per basket, migration of customers to multi-category buyers, and slightly by currency.
What is even more encouraging is that the average order value for Booztlet is up 10% and getting close to the average order value of Boozt.com. This is the key to a strong profitability. Our stock position is very healthy. We have received the autumn-winter 2023 stock much earlier than last year, as the supply chain disruptions that affected last year's in- deliveries no longer persist.
This enables us to take advantage of the unusually early start of the Autumn/Winter season, driven by the miserable weather in the Nordics. This is also why we have more confidence in narrowing, maintaining our midpoint at 10% for the growth and SEK 325 million for the Adjusted EBIT.
Going to the next slide, the customer satisfaction KPIs. During the quarter, we have maintained our five-star rating on Trustpilot, and even though NPS is slightly down, it is more or less stable and still at a best-in-industry level. This tells us that we still are able to meet and exceed the expectations of our customers in terms of selection, price, and convenience.
If you go to the next slide, we can see that the number of orders is up 2.4% versus Q2 2022 on Boozt.com, and the average order value is up by 5%. Year to date, the number of orders is up by 2%, and the average order value is up by 8.2%.
Finally, it's actually quite interesting that the average order value is up 12% compared to Q2 2021, 2 years ago. This is a very good indicator showing that the department store strategy is working, and this is the reason why we are more profitable than most, if not all, of our peers. Moving on to the next slide, the cohort development.
The active customer base is slightly up compared to last year, which is quite encouraging, taking into account that we have been operating in a quite depressed market. Number of orders per active customer is also up and now at 2.4 orders. True frequency is up 6.6-6.8 versus last year, but I believe that the most interesting thing is that it's up from 6.3 two years ago.
This is again, a proof point that our loyal customers are buying more frequently, embracing our department store strategy. Let's go to the next slide. Before I hand over to Sandra, I would like to touch on our ability to get customers to buy into our different departments. There we see a very nice movement in customer behavior.
Last year, 60% of customers who bought in the last 12 months only bought one category. This year, that number is down to 52%. We see a nice movement from one to two, from two to three, et cetera, et cetera. This, to us, demonstrates that we're able to get customers to buy into the department store concept, and this also explains why, why our average order value continues to increase. I will now hand it over to Sandra for some perspectives on the financial performance.
If we look at the results for the quarter, net revenue growth was 8.6%. The impact on net revenue growth of 4.2 percentage points and relates primarily to the strengthening of the DKK in EUR compared to last year. As we mentioned in our Q1 call, the spring-summer season started off rather late due to the cold weather conditions in the region. As the weather got more spring-like, the momentum improved with higher growth rates in the beginning of the quarter, while customers became more cautious at the end of the quarter.
Finland and Denmark were the strongest growing countries in the second quarter. Return rates increased slightly compared to last year as a result of the product mix. However, we do not see any increased underlying return behaviors in each of the categories. Other revenues constituted 4% of the total net revenue.
Growth of other revenues was related to Boozt Data Intelligence, a new part of our Boozt media offering, where our brand partners get valuable data insights related to their assort-- that can be used to optimize production volumes, reduce returns, compare performance with relevant peers, and such. For the first half of 2023, net revenue growth was 7.9%, including a positive impact from currencies of 3.6 percentage points.
As a result of the attractive inventory mix with a higher share of campaign buys than last year, we managed to increase the gross margin with one percentage point to 42.3% in the quarter. Year to date, the gross margin was 40.5%, a slight increase from last year's 40.4%. The Adjusted EBIT margin was on par with last year in the quarter, 5.1% versus 5.2% last year, and year to date, the Adjusted EBIT margin increased from 3% to 3.2%.
If we move to the next page, sorry, we can see that the revenue growth for Boozt.com was a solid 8.1% in Q2, positively impacted by the strengthening of the DKK and EUR. Year to date, growth was 10.1%. The market continued to be highly pro-promotional driven also in the second quarter, as the Nordic fragmented market that we operate in has many small and medium-sized players fighting for survival at the same time as consumers hold back on spending.
Growth for Boozt was driven by a solid performance and growth across all categories, showing the strength of the department store model. Beauty, home, and kids had the highest growth rates in the quarter. Growth was fueled by the attractive inventory position, which enabled a competitive offering to our customers.
Looking at the customer base, we saw an increase of 1% of active customers at the same time as our cohorts displayed encouraging buying patterns despite pressure on disposable incomes. This was showcased in the increased True frequency, going from 6.6 to 6.8 orders.
As a reminder, the true frequency is how we measure the order frequency from customers that have been with Boozt during the last 12 months, therefore, not impacted by orders from new customers. The average order value was 896 DKK in the quarter and 915 DKK year to date, corresponding to a growth of 5% in the quarter and 8.2% year to date.
While the AOV was positively impacted by currencies, the underlying increase was driven by the number of items per basket, which is in line with the department store strategy, where we take higher share of our customers' total spending as we widen our assortment and build strong categories. The Adjusted EBIT margin of 4.9% was on par with last. If we move on to Booztlet.
As you might recall, we presented a few new initiatives we're implementing to make Booztlet even more attractive to environment at our last earnings call. These initiatives that aim to strengthen Booztlet as a relevant shop 365 days per year, rather than primarily driving seasonal stock clearing, are developing according to plan and helped us grow the Booztlet segment with 11% in the quarter.
Year-to-date, net revenue growth was a negative 1.6%. Year-to-date numbers are negatively impacted by the first quarter, where the Booztlet segment was impacted by the higher-than-expected sell-through of inventory coming into the year. With the new concept, we aim to mitigate such effects with an offering with more focus on basics and seasonal relevant inventory.
Just as we mentioned in the first quarter, we believe that the typical Booztlet customer is relatively more impacted by the pressure on disposable incomes than the typical Boozt customer. We have seen examples in the second quarter where customers in a specific local market active on the Boozt sites to Booztlet interaction increases. We see this as a sign that the basic foundation of Booztlet as a hedging tool for our existing customers seem to work.
The stock composition with a higher level of campaign stock enabled us to keep healthy growth margin in the second quarter, despite the maintained highly promotional environment in our industry. The average order value increased 10.3% in the quarter to 873 SEK. Year to date, the average order value increased 11.6% to 894 SEK.
The increase is positively impacted by currency effects, but dri- but driven by increase in number of items per basket. The Adjusted EBIT margin was 5.9% in the quarter, compared to 6.5% last year. Year to date, the Adjusted EBIT margin increased from 2% to 2.4%. Our ambition for Booztlet is to deliver higher for the group with healthy profitability. Let's move on to the cost ratios.
The fulfillment cost ratio decreased from 11.4 to 11.2% in the second quarter. The development is a result of continuous improvements, as well as continued positive impact from the higher average order value. Negative currency effects on distribution costs outside of Sweden offset these improvements slightly. Year to date, the fulfillment cost ratio decreased from 11.9 to 11.6%.
The marketing cost ratio of 11.1% was on par with last year. We stick to our principle of investing into profitable growth with a payback period of 16-18 months. We remain confident that this enables us to gain market share also in the current environment, especially as we experience that marketing costs are coming down, which should enable us to continue to get high return on investments.
Year-to-date, cost ratio decreased from 11%-10.6%. The admin and other cost ratio increased one percentage point to 12.3% in the quarter. While salary increases implemented in May had an impact on the absolute amounts, the relative cost for personnel was on par with last year in the quarter.
While our cost structure protects us from significant impacts from inflation, the current environment does impact our cost base to some extent, as the weak Swedish krona had a negative impact on operational costs. This is the main driver of the increase of admin and other costs in the quarter.
Year to date, the admin cost ratio increased 0.4 percentage points to 11.2%, driven by negative impact from currencies, partly offset by lower cost of personnel. The depreciation cost ratio increased 0.2 percentage points to 3.7%, as expected, and as a consequence of the higher availability at the BFC after the investments that we made over the past year. Year to date, the depreciation cost ratio increased from 3.6%-3.9%.
The increase was partly offset by the reassessment of useful lives of selected parts of our fixed assets. Let's move on to the next page. Here we see that net working capital was 11.1% of the net revenue for the last 12 months, which is 1.5 percentage points higher than last year. The net working capital increase is driven by the investments made in inventory, with an inventory composition tweaked to support strong sales in the second half of 2023.
We believe that there are good opportunities to accelerate market share, and that is what we are prepared for. Looking at net working capital, there are some timing differences, which makes comparison between quarters a bit misleading, especially. The last few years, supply chain issues created delays that now normalized.
We've seen in- deliveries for the autumn-winter season earlier and with less cancellations than in comparable period. This will likely impact net working capital at the third quarter cutoff. However, the position that we are in right now strengthens our ability to deliver strong, profitable growth for the rest of the year, which is our main priority. Free cash flow for the quarter was a negative SEK 10.2 million.
That is to be compared to a negative SEK 229 million last year, mainly driven by the lower investments in CapEx, according to plan. Rolling 12 months free cash flow per June is a positive SEK 33.6 million, to be compared to a negative SEK 893 million last year, with an improved operating cash flow, as well as the planned lower CapEx.
The cash flow generation in December last year was extremelymainly due to the higher than expected sales and sell-through of inventory. This impacts our free cash flow year to date negatively, as accounts payables decreased significantly in the first quarter from the higher than normal level as per December 2022.
Cash flow year to date improved compared to last year, as we have less investments, but net working capital changes are negatively impacted compared to last year due to these timing effects. As we expect timing differences to continue into the second half of 2023, cash generation will likely be tilted towards the fourth quarter.
According to plan, we only made limited investments in fixed assets in the quarter. Year to date, CapEx for fixed assets was SEK 11.7 million, and investments in the development platform was SEK 48.1 million.
As communicated earlier, we expect CapEx for the full year in the level of SEK 150, whereof around SEK 100 million is related to development cost. The ambition is to deliver a positive free cash flow for the year. Our cash position at the end of the quarter was SEK 901 million. That is to be compared to SEK 1,038 million last year. This concludes the financial update, and I will hand back to Herman.
Thank you, Sandra. And, and, let's just go to the outlet outlook slide. Well, the market for fashion and lifestyle products has had a quite modest start to 2023. We see that we are taking significant market share, as well as we can see, and, and probably even more share points than during COVID.
We're able to get a lot of customers to buy into our categories. Marketing costs have come down recently, and we're getting more mileage out of a marketing spend at the moment. Therefore, seeing how the first half has turned out and taking the start of the autumn-winter season into consideration, we don't see that the revenue growth will be below 7.5% for the full year.
At the same time, we believe that it would be rather optimistic to assume that we will be growing more than 12.5% for the full year, taking the strong comps from last year into account. Therefore, we narrow the range, but maintain a midpoint of 10% growth for the full year. The same applies to the Adjusted EBIT margin, where we maintain a midpoint of SEK 325 million, but narrow the range.
The midpoint of SEK 325 million represents an Adjusted EBIT margin of 4.4%. As Sandra said, we still expect a modest level of investments in fixed and intangible assets, with CapEx between SEK 150. Before I hand it over to the operator, I would like to touch on our staff satisfaction. Going to the next slide.
I know that it's, it's actually very unusual to include an eNPS slide in investor call. eNPS is the Employee Net Promoter Score. Our eNPS is absolutely best in class and at a level of top 1% of companies measured. Our top performer people, they are the reason why we are stronger than ever before, and they are also a reason why we are managing the downturn better than most.
They also will be the reason why we will be able to handle the turning tide faster and better than most. Just like NPS is a pretty good indicator of future customer success, we believe that the eNPS is a solid predictor of future company performance. This concludes our presentation, and I would like to hand it over to the operator to give the Q&A session underway.
If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Niklas Ekman from Carnegie. Please go ahead.
Thank you. A couple of questions. Firstly, can I start with your comments here on current trading? You don't specify current trading. You talk on the one hand of a weak end to Q2, then in the call here, you mentioned that you benefited from an early start of the autumn. I just note that even the low end of your guidance requires that you show similar growth in H2 as you did in H1, but you face significantly tougher comparisons in Q4.
I'm trying to see here what you're actually trying to communicate here, because it sounds like the guidance suggests that Q3 must be off to a much stronger start than Q2. I'm just curious if you could elaborate a little bit here.
Yes, Niklas, as you know, we, we don't comment on, on current trading, I don't want to kind of go into that discussion other than, of course, you know, we are more confident in our guidance. We know, we almost have eight months of the year in the books.
The weather is quite good for selling Autumn-Winter season items, to be honest, the, the, you know, when people have been looking at SimilarWeb to predict our performance or traffic, we think that is quite misleading. I think kind of that we are confident, again, we don't see a 50% growth, but we also do not see a 7.5% growth. I think just, this is just a sign that, that, that, we are confident in, in our ability to deliver the 10% that we promised at the beginning of the year.
Very good. Thank you. You mentioned here, on the one hand, you talk about a more cautious consumer behavior here during the summer, and on the other hand, you talk about improved consumer confidence. I'm curious, which one of these do you think is the most important?
The most important thing is that our customers buy into our proposition. This is what we see. You know, they're buying more categories, putting more items in the basket, increasing basket size. In some countries, we-- it looks like consumers are getting more confident. In other countries, it could be Sweden, consumers are holding back.
So, so of almost schizophrenic environment, but, but, but I think we are, we are managing that quite well. We have Boozt.com and, and the department store, and then we have Booztlet, which is the value shop, which kind of seems to kind of be just right at the moment with the, with the value for money. So I think that in a very kind of rough, rough seas, we are handling that, that quite well.
We have to remember that we don't really have any issues. You know, we don't have old inventory to offload or stuff like that. We only have to focus on selling more today or tomorrow than last year. No matter what kind of the consumer confidence at the moment, the consumers are buying into our two shops.
If I may add, it's not like the consumer confidence in general on the overall market. We think that that's much better, but we believe that there are good opportunities for us to take market share.
Super clear. On the topic of inventory, you mentioned campaign buys here, in the quarter, that was a contributing factor. How do you see that going into H2? Are you seeing an increased level of campaign buys, or are you already at a high level?
Well, we, as you know, we started the year with two low inventory, and we had opportunities to invest in campaign buys. That's what we continue to do and, and will continue to, to do also coming into, to the second half, balancing with how the season goes and, and balancing with the in- deliveries of, of the, of the seasonal stock.
What, what is different this year compared to last year, and I mentioned that, is that the in- deliveries are much earlier. We have the things, in our warehouse right now, which also means that we're ready to sell them earlier than, than, before.
Very clear. Also, can I just ask about your customers as well? You're at 2.5 million customers, and that's fairly unchanged compared to where you have been in the last two years. Growth has mainly been driven by average order value. Are you finding it increasingly difficult to recruit new customers? Is this a deliberate strategy? Can you just elaborate on your thoughts there?
It's a good question. It's, it's, it actually, it actually goes up and down, you know, you can see that during the first half, there were some months where new customers were kind of more cautious, and then again, they came back. I think kind of, our new customer growth is, is, is actually quite stable.
But of course, you know, the growth at the moment is very much driven by our ability to get them to buy into more categories. But of course, you know, you lose some customers who kind of maybe sleep for 12 months or 18 months and then come back. It's, it's, our marketing, guys, are still very strong. You know, customer acquisition costs, payback are the same, so this is why we basically continue to, to do what we're doing.
Superb. Thank you. Thank you very much for taking my questions.
Thank you, Niklas.
The next question comes from Daniel Schmidt, from Danske Bank. Please go ahead.
Thank you. Morning, guys. Morning, Sandra and Hermann. A couple of questions. Just following up on, on the active customer base, I think it's been actually quite flattish now for six, seven quarters. At the same time, you are saying that you're gaining market shares, and you have a sort of attractive offering, and customers are picking from more categories than before. Wouldn't it be reasonable to see the active customer base growing in that scenario?
Of course, you know, if, you know, we-- if the growth is very much based on basket size, buying into more categories, that's a very positive thing. This is exactly what our strategy is. Some customers, they, you know, we, I think that, you know, since early days, then we talked about that a significant some parts of our new customers are not attractive customers.
And then they remove them, either to Booztlet or just don't want to get them back because they are not going to be profitable. It's also kind of an active decision for us not to kind of reengage with bad customers, but kind of, but our ability to get customers to buy into more categories, putting more items into the basket, the Nirvana of e-commerce. We are very satisfied with how things are developing at the moment.
Yeah, speaking about sort of, being a bit more selective, and, and, maybe that explains it, too, because I, I, I discovered that you stopped taking orders. In Sweden, it is orders below SEK 299, you don't process those orders, I think since beginning of June. What's the, what's the sort of feedback outcome? What do you feel about that action?
It's very positive. You know, we don't want to do unprofitable e-commerce, and when you have order value below that number, you know, it doesn't make any sense at all. Of course, if you ask customers, would they prefer not to have that limit? Everyone would say, "No, no, we would like to have kind of no limits," but sometimes you don't have to. You shouldn't ask the customers about it, just do it.
Because it's fairly new. I haven't seen it, anyone doing that before. I was just thinking, wouldn't it be a way to basically say that if your order value is below SEK 300, you have to pay twice as much for delivery? Is this a better solution, you think?
We think it's a better solution. You know, asking customers to pay double delivery, that kind of it, that would be a strange thing. Our assortment, you know, you can always find something above that threshold. If your customer buying a pair of socks and, and kind of, and asking for a shipping and return for that, that just doesn't make sense.
It's very few orders that are below this level, so it's not like we canceled many orders.
No.
in any way. This is, this is just a thing in the margin.
Yeah. No, I've, I haven't seen anyone doing it. I think it's, sort of, it's a new, new policy, I guess, that you're out with. It's gonna be interesting to see how it works, of course.
yeah, I think it's-
Sorry, I didn't hear you, Herman.
I think it's, it's not new. It's actually been in the market, also by our peers.
Okay, I haven't seen it, then. Probably, maybe some others are doing it, as well, then.
Yeah.
Yeah.
I think most have a minimum order value before they process the order.
Not to process it, I haven't seen. More that you have to pay for delivery.
Yeah.
I haven't seen that you won't be able to finish the order. Anyway, it doesn't matter. Then you mentioned, as sort of Niklas also touched upon the poor ending to Q2, but you said that the sort of the, the SimilarWeb date that everyone is looking at is, is misleading for, for July. Should we interpret that as that momentum picked up in July versus June?
It's a, it's a tricky question, Dan, because we don't want to comment on, on current trading, but obviously, you know, start to the quarter, we probably wouldn't be as confident in our, our guidance as, as we are now.
Could we read it as maybe things progressed in a better fashion as you got into August, then? Is that a sort of a, a reasonable, sort of, reasoning?
I, I don't want to contradict you on that, so, so, yeah.
Okay. Just a, just a detailed question as well. I've noticed that capitalized development costs have increased quite a lot over the past two quarters. It's around SEK 23 million per quarter now instead of SEK 17 million. Is that gonna continue for the second half as well?
The level we are at right now is what we will continue to do. Yes. It's we hire people who do development, and we are making good progress on that.
Yep. All right, good. Thanks, guys. That's all for me.
The next question comes from Simen Aas from DNB Markets. Please go ahead.
Hey, good morning, guys. A few, few questions for, for me here. You said that you continue to take market share, and could you give us some color on how is the market developing, what are the numbers you're seeing? Are they going down, or... Who is the winners and who is the losers in, in this market?
Well, if we do it very simply, we look at our main competitors, and we see that they, they have a declining revenue, obviously, and we know that things in the local players, the small local players, are fighting for survival. We are growing.
We, of course, follow all, everything related to consumer confidence and how are the local markets performing. We just see that we're, we are growing much more, more than the average. It's not like we have an exact number of the market share we're gaining. That's quite hard to get.
Yeah, okay, okay, that, that's clear. Then just a follow-up on that one. Now you're entering kind of the high season of retail and entering soon, coming into Black Week and Christmas sales, et cetera. Are you afraid that the market will be even more campaign-heavy, given that your competitors are losing out at the moment?
Well, we don't think that it, the campaign activity will, will decrease. We know that it's gonna continue to be competitive, and that's what we are prepared for, and that's why our inventory position is so important, that we're ready, that we don't have a lot of old stuff, that we can focus on trading the in-season stuff, that we have campaign goods that will help us, so that we can deliver on the, on the, on the growth market. It makes us profitable and makes our business remain healthy. This is, this is kind of the main priority and what we discuss every day. That's what we are prepared for.
Yeah, okay, that, that's very clear. Then just one last one for me here. If I'm not wrong, you are currently placing orders for spring, summer next year. Could you just talk about how you think about ordering goods now and given the macro, how do you see kind of the future here? It'd be interesting to get your thoughts on that.
Yeah, basically, the future is bright, if you ask me. You know, in a market like this, it benefits the big players. It benefits the players who have a very strong, value chain, very cost efficient. We are, we have, on the one hand, very numbers driven, you know, SS24 buy, as well as we are kind of gauging consumer development.
I think that if, kind of, the cautiousness is based, that, that it's, it's more kind of never out of stock items and less seasonal items that, that customers are buying in a economic downturn. in general, we are very bullish, also very bullish for e-commerce as, as we see that the, that e-commerce is, is, if not bouncing back, now is in a strong, trajectory again. We are actually quite optimistic going forward because we feel that we are in a very good shape.
Yeah, okay. Just to follow up on that one. Do you think kind of, to look into, when we look into next year, we usually think that, are you aiming to capture more market shares, or how should we think about that? Or are you more cautious?
Yes, we will, we will capture more market share. That's our strategy. We said that we will have 10% of the online market and 10% of the total market online, and that means that we need to grow more than the rest of the market. Definitely we will take market share also next year.
Okay. That's all for me. Thank you, guys.
You're welcome.
Thank you.
The next question comes from Benjamin Wahlstedt from ABG Sundal Collier. Please go ahead.
Good morning. Thank you for taking my questions. Going into the year, you anticipated a very high campaign pressure, but in this quarter, you expanded gross margins meaningfully, I believe, year-over-year. Could you talk a bit about what you see here ahead of the upcoming season? Maybe what you see in terms of competitors, inventories, and so on, please?
Yeah. I think our very strong position coming into the year or actually lacking goods, meaning that meant, meant that we could, we could focus on the in-season and campaign goods, that, that gave that margin. We also have, as you know, other incomes that, that helps us, even if it's, even if it's tough on, on the competition side, we are able to deliver this around 40% gross margin.
That's the ambition, that's what we will continue to do, and that's what we think we're ready for. Looking at coming into the new season, we know what we have. We have a strong inventory position, as we said many times. Our competitors, we know that some are a little hesitant in taking in on new inventory, but of course, we don't know their strategy overall. Whatever happens, and we, we expect it to remain competitive, but we are ready to take, to take on that challenge.
Perfect. Thank you. In recent quarters, you've commented on a higher growth rate for specific categories such as home and beauty. Could you give us an update on the development for these categories again, please?
Yeah, they are still growing at a very high pace, much more than, than kind of the rest of the shop. Of course, they are growing for from a low base, but, but it's, it's, it's very, very high growth. Yeah.
Yeah. Sort of to follow on that question, you talk a bit about return rates in the report. I believe you see lower return rates for the home and beauty categories, typically. Seeing that these categories continue growing, as you say, much faster than the average, could you perhaps comment on the increased return rates in the quarter and, and elaborate?
You, you make a comment on, on the product mix, but I mean, given that home and beauty continues growing much faster, that should, that should support return rates, right? Or, or lower return rates, all else equal.
Yeah. So the way it works is that when, when the lower return rate categories such as home and beauty grow, you see in the product mix. You, you see different patterns in depending on, on the, you know, month to month, it, it shifts a little, not much, and, and, and the return rate increase is not much, but it, it is slight.
That could be like, say, women have a higher return rate than men. If the women constitute a higher share than the men's category, you know? It's not only depending on those beauty and home, they are rather small categories, but if you see a shift in, in, in between the other categories, that's normal. It's, it's nothing, you know, it's not nothing underlying. We don't see like that, that home, return rates have increased, or, or anything like that. It's just a natural shift, as I see.
Yeah, loud and clear. Then I would want to discuss the sales target a bit more. The Boozt.com platform grew by 10% year to date, meaning basically the reason why you're not on pace year to date for the, the 10% sales growth target is Boozt essentially. You sound quite optimistic on H2. Is this should do you wish to sound optimistic on, on H2 also for the main Boozt.com platform?
It's good that we sound optimistic, but it's not a strategy for us to sound. It's that we just, just want to convey that, that, or want to be realistic. Booztlet had a bad Q1 and bounced back in Q2, and seems to be just right with regards to a large customer base in the Nordics or consumer base who are being more value-driven, and Boozt.com is like, what how do you say, you know?
It's, it's very, very encouraging to see that, that they are buying into the categories. And I'm, I'm, I wouldn't say that I'm surprised, but I'm really, really happy to see that, that, that we are able to, to, to, to, to get them by.
Club also helps in doing that because we've been trying to kind of tease them into trying the categories and giving them some bait, and they seem to bite on that. That's why we are confident, and as Sandra was saying, that the stars are quite well aligned for us. We don't really have any issues, we don't have any old stuff to fix.
Our, you know, we have more items in the warehouse than we had last year, where we had the supply chain issues. The season has started earlier, and we are very competitive and still we're able to deliver fast, et cetera, et cetera.
I think that kind of we are in a it actually in a very, very good shape, which is why we are realistic and believe that we can continue on this, on this very good track. I think that kind of all the investments we made in the, in the, the two shops, in the brands, in the inventory, and in the supply chain, seems to be timed right in the market to come. That was a long explanation of that.
No, I think it's, it's good, it's insightful. One final question as well: Could you comment on the development between markets, please? It seems the Swedish market is rather sluggish compared to Denmark. Is this a result of market demand or, or market assortment fit, or, or anything else? Anything to compare the markets really would be helpful. Thank you.
Well, in general, and I think we said that before, is that Denmark and Finland was quite strong, and Norway and Sweden has been a little more hesitant, and people have been holding back. If that depends on how the interest market looks like, that they're more alike, could be, but we've seen stronger sales in Denmark and Finland, basically.
It's a, it's a result of general market demand, then, is your, is your, estimate?
Yeah.
Yeah.
That's what we especially Norway, we think the consumer confidence has been really, really low.
All right, that's, that's it for me as of now. Thank you very much.
Thank you.
Thank you.
The next question comes from Nicklas Skogman from Handelsbanken. Please go ahead.
Good morning, everyone. I have one question or, or a question on one topic. I asked about this in, in the Q1 as well, relating to the Boozt Media Partnership. Other revenue grew 16%, this quarter. Is it fair to assume that that's pretty much was also the growth for the Boozt Media Partnership revenues?
not only-
So, no-
We al- we also have, Boozt Data Intelligence, a new product where we offer, you know, outstanding insights into consumer behavior and, and, and performance of the brands. So it's a combination of Boozt Media Partnership and, Boozt Data Intelligence. We also have, Boozt Pay, which is our own, payment, provider, also has seen-
Yeah, that.
growth. so it's a, it's kind of a-
Okay.
Combination.
I was more wondering if those sort of data selling businesses were growing roughly with 16% as well, or if it was something else? If we assume it so also grow roughly at that rate, wouldn't that be one of the main driver of the increase in the gross margin then, given the very high margins? I mean, I calculate maybe a 40 basis point boost from the growth in the other revenue.
Yeah
you only really you only really mention that it's the campaign buys that lifted the gross margin.
Yeah, if you look at the product margin, and it's been very competitive, we can, we can help that with, with campaign buys. Then again, you're right that the, that the other income, it really helps us keep the gross margin high, and that's the hedging tool that we have, and that's the strength that we have compared to many others, since our size allows us to have this and still keep a, a stable gross margin, even when it's very competitive on, on the product margin side.
Okay. I think the reason it declined in Q1 was because you had made less pre-buying, and now it, of course, clearly swung back again. How, how do you see the rest of the year for, for this business?
Well-
Will brands still be keen on spending on those services, you think?
there are, there are differences between the quarters, and we haven't had the BDI. It's quite new, so it's not, like, totally comparable. The BDI business is going as planned. Many of our brands appreciated, use it. we see new, new signs, or we, we sign new brands every day, so it's going according to plan. Then what the number will be, that, that remains to be seen. It, it's going according to plan, and we know that our brands appreciate it, and we're very happy about it.
All right. Thank you.
As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Yeah, okay. Thank you for some very good questions, and thank you for participating in this call. Yeah, I hope you have a good day, and I guess we'll see you again in, three months' time. Thank you.