Welcome to the RevolutionRace Q2 presentation. During the Q&A session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to the CEO Paul Fischbein and CFO Jesper Alm. Please go ahead.
Thank you, Operator, and good morning, everyone, and welcome to this conference call where we will address the report for the second quarter of the financial year 2025 and 2026. Our financial year starts 1st July and ends 30th of June. So Q2 means the period from October 1st to December 31st. My name is Paul Fischbein, and I am the CEO of RevolutionRace. Joining me today for today's conference call, I have the company's Chief Financial Officer, Jesper Alm. For those of you who are new to the RevolutionRace story, I will start by giving you a brief introduction. RevolutionRace is an international outdoor brand offering outdoor products, mainly clothing, but also shoes, footwear, bags, and other outdoor products. Everything started with pants, and that category is still the largest product category. We operate with a D2C business model, and this is important to understand.
It means that we skip the middleman and sell our products directly to consumers. We do this mainly via our own website, RevolutionRace, but also through, for example, marketplaces such as Amazon. With our D2C business model, we can secure our competitive offering and, at the same time, also maintain industry-leading margins. Going back, our brand was very much built on our community on social media platforms. Today, we have more than 2 million followers on those platforms and over 750,000 reviews on our site, product reviews. RevolutionRace was founded in 2013 and launched in 2014, and we have been listed on Nasdaq Stockholm since 2021. Our headquarters is located in Sweden, and we have today approximately 140 employees. This picture illustrates our international presence. We have customers today in around 40 countries.
We have 19 local webshops, including that we recently opened our Canadian site, and we also currently have two physical stores. We design all our products in-house in Sweden and work together with more than 25 suppliers for the production in Asia. Let's now take a look at our performance and net sales development in the quarter. Q2 is historically the biggest quarter, and we are very pleased to present a quarter with record sales and the strongest result in RevolutionRace history. Net sales over the rolling 12 months, that means the full- year 2025, passed for the first time SEK 2 billion, and that is, of course, a milestone for the company. Net sales in the second quarter amounted to SEK 726 million, resulting in sales growth of 11% in local currencies if you compare it with Q2 last year.
Despite the continued uncertain market environment, this means that we continue to gain market share and we strengthen our market positions. During the quarter, net sales margins and also earnings were negatively affected by currency effects. That follows a stronger Swedish krona as the majority of our sales are generated in other currencies than SEK. For example, we have 75%-80% of our sales in euro while we are reporting the quarterly results in Swedish krona. On top of the underlying currency effects, we also in this quarter, we had a currency-related negative item of SEK 1 million compared to a positive item of SEK 5 million last year. Only here, the difference amounts to SEK 6 million compared to last year. All in all, we would, in fact, have an even higher profitability if you remove these currency effects when comparing with last year.
Looking at the geographic split of sales, we deliver growth across all our three reporting regions during the quarter. Sales in our largest and most important region, the DACH region, remained strong and increased by 14% in local currencies. Germany, that is our largest market, grew by 11% in local currency, while sales in Austria and Switzerland continued to perform very well. In the Nordics, sales growth increased by 6% in local currencies. Also yesterday, we saw the Swedish Sportindex. It was published, showing that outdoor sales in Sweden declined by 9.2% in the calendar fourth quarter. In contrast, our sales increased by 2% during the same period. I think this clearly reflects our continued and significant market share gains. Sales in the rest of the world region increased by 6% in local currencies.
Excluding U.S., this rest of the world region would have grown by 10% in local currencies. Currently, we are not focusing on our U.S. sales since we are revisiting our logistics setup in order to match new tariff conditions. We hope to be able to again focus on U.S. later this year. Let's continue to look closer at the second quarter. We continue to deliver strong industry-leading margins. Once again, we show our ability to combine growth with solid profitability, even in a challenging market environment. Earnings grew faster than sales during the quarter, amounting to SEK 180 million, corresponding to an adjusted EBIT margin of 24.8%. Gross margin for the quarter was 69.8%. We saw negative currency effects from the stronger Swedish krona, as most of our revenues are generated in other currencies, primarily euro, as I mentioned, while we report in SEK.
We can move on and look at cash flow. Cash flow from operations was strong in the quarter, amounting to SEK 360 million. We continue to maintain, as a result, a solid financial position with a net cash position of SEK 341 million. And that's actually despite having distributed dividends of SEK 143 million during the quarter. And on top of that, we also repurchased shares for SEK 39 million under our share repurchase mandate. So all in all, we feel that we have a healthy position. Looking also at some product development, we've continued to develop and expand our Alpine segment ahead of the winter season. But we have also launched new products, for example, for cross-country skiing and also winter running that has performed well in the beginning.
These launches and our new premium collection, the Ultra Series, that was also launched in the quarter, have been well received. Looking ahead to the coming quarters, we see further product development and launches that will strengthen the offering going into the spring season. One example of that is our best-selling outdoor pants, which are being updated with additional length options. With that, I would like to hand over now to the company's CFO, Jesper Alm, who will present and walk through the financial performance. Jesper, please go ahead.
Well, thank you, Paul. Good morning, everyone. I will briefly cover the financial performance during the second quarter of the financial year 25/26. Gross profit amounted to SEK 506 million for the quarter compared to SEK 481 million a year ago. This equals a gross margin of 69.8% compared to 70.3% last year. The slight decrease in gross margin is mainly attributable to currency effects on net sales and goods for resale. Personnel expenses are slightly higher compared to the same quarter last year, and the number of full-time equivalents increased to 140 from 134 last year. The increase is mainly due to the hiring of staff for our physical stores. Personnel expenses, a share of net sales, were in line with those of the same quarter last year. Other external expenses came in at SEK 287 million compared to last year of SEK 290 million, a slight decrease.
As a share of net sales, that was approximately 40% and obviously lower than last year. Adjusted EBIT for the quarter amounted to SEK 180 million compared to SEK 162 million a year ago. The EBIT amounted to SEK 177 million compared to SEK 158 million a year ago. This translates to an adjusted EBIT margin of 24.8% compared to the 23.6% last year and the EBIT margin at 24.4% versus 22.9%. The adjustment in this quarter of SEK 2 million is related to an AGM-approved incentive program. And normally, Q2 is the only quarter where we have an adjustment. The non-favorable currency effect affecting reported sales and the gross margin had a corresponding impact on the operating profit and also noting a certain overrepresentation of SEK-denominated expenses. The underlying currency-adjusted result has some upward potential compared to the reported.
Adjusted EBIT for the last 12 months amounts to SEK 418 million. As Paul said, the balance sheet remains stable. Changes in line with seasonality. Net working capital decreased to SEK 81 million compared to SEK 118 million a year ago. Changes in net working capital are primarily driven by lower inventory levels and a decrease in current liabilities. The inventory amounts to SEK 494 million at quarter end, of which SEK 378 million was goods in warehouse compared to a total of SEK 592 million a year ago. Goods in transit have decreased from SEK 161 million to SEK 88 million.
Ahead of the quarter, we carried out a planned inventory build-up to meet seasonally higher sales volumes. We're now satisfied with the inventory levels. Our financial position is strong, and we had a solid cash position of SEK 358 million at quarter end and a net cash position of SEK 341 million, adjusting for lease liabilities.
The credit facility of SEK 600 million remains available and undrawn. Cash flow from operating activities came in at a strong SEK 360 million during the quarter, which means, in conclusion, that we have a strong financial position and are well prepared to manage ongoing market uncertainty while maintaining financial discipline and operational flexibility. We aim to distribute 40%-60% of net profit annually in accordance with the dividend policy. As a result of the company's continued growth and strong financial position, the AGM in November resolved on a dividend of SEK 1.35 per share for the previous financial year, which implies a growth of 13% compared to the dividend of SEK 1.20 a year ago. The dividend in total amounted to SEK 143 million.
In addition to the dividend paid, we continued repurchasing shares in line with the AGM mandate during the quarter, acquiring shares for a total of SEK 39 million. Also, in accordance with resolutions of the AGM, we canceled 3.8 million treasury shares, which corresponded to 3.5% of the total number of shares outstanding. With that, it's over and out from me, Paul.
Thank you, Jesper. So to sum up, the market situation and also broader conditions remain uncertain. It's difficult to assess, but we believe that we are well prepared, have a strong business and a strong financial position.
The outdoor market has been challenging in recent years, but during this time, we have shown that we have continued to strengthen our competitive position. With our strong customer offering, the industry-leading margins, high customer satisfaction, that gives us a solid foundation for continuing our profitable growth journey.
And having said that, we can also say that we are pleased to report continued sales growth also during the first weeks of January. That concludes our comments on the result. Before we finish, I would like to thank everyone who has contributed to our performance during the quarter, includes employees, customers, important partners, and also shareholders. With that, we are now happy to answer questions. We have a question to the operator. Do we have any questions?
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Emanuel Jansson from Danske Bank. Please go ahead.
Good morning, Paul and Jesper. I hope you can hear me. A couple of questions from my side. First off, a really strong quarter. It's impressive to see growth across all regions, excluding the U.S.. I know it's still early days into reporting season. I think I touched a little upon it, Paul, already. But we have Q4 number yesterday. I wonder if you could maybe touch a little bit more on the broader market development in this quarter versus the previous one, on how you think that has developed.
Yes. Hi, Emanuel. So yeah, I'm sure you saw that also. We received data from the Swedish Trade Federation reporting the Sportindex, and also they disclosed the performance of the outdoor industry. And we have now, we have seen over the last three-four years, almost every quarter, a decline. I think the calendar Q2 was actually an exception where we saw an increase in the market. It is difficult to estimate where the market will go from here. We can say that in Sweden, we had lower growth, actually, compared to many of our other markets. So it seems that Sweden continues to be tough. We had only 2% growth in Sweden, but compared to the Sportindex, it was down 9%. So you can argue that we are actually growing by roughly 11% in Sweden compared to the market.
We see on an overall basis that we continue to grow in January. That is what we have, that what we are disclosing today. We don't provide any guidance. As I also mentioned, the world, it's very difficult to sort of assess where the market will head from now. We also, on top of that, we operate in so many markets. I guess you also saw some data from Germany, for example, reflecting the market performance in Germany in December. They were also pretty weak. Hopefully it will turn around and be stronger. Having said that, for us, we believe that we are very well positioned. We feel that also in tough market conditions, we have a stronger offering. I think we have been showing for some time that we can also grow in tough times.
Perfect. Thank you very much. And following up on that, how did momentum look on a month-to-month basis for you? And were there any specific markets that stood out as particularly strong performance during this time period that you want to highlight?
Yeah. Market-wise, I would say that we have two markets really standing out, and that is within the DACH region. Switzerland and Austria are performing very well, both delivering 20%+ growth in this quarter also. So that is very promising to see. It seems that we have a very strong, we have strong momentum in the whole DACH region. Germany, of course, being the biggest market still. I mean, for us, it's the highest population, biggest market. But Austria is getting closer to more structural, becoming one of the two top three, four countries. And in total, Switzerland is in fact the country with the highest growth of the sort of focus markets that we have. So both we can sort of, yeah, can highlight those two markets as very strong performing markets.
Thank you very much. Considering that we had a fairly mild winter here in the Nordics, at least, I'm curious about the Alpine Collection that you mentioned. It was such a hit last year. How has that performed this time around and are there any other categories that you would like to highlight? I also assume that the cold weather in the start of January is not negative for you, right?
Yeah, it shouldn't be negative, of course. We enjoy cold weather business-wise. As you say, it was a bit mild, at least in Sweden, but also in Europe during the Q2. I think a colder winter would have been more favorable. But we have seen some lower temperatures and more snow in January. However, the Alpine Collection is maybe not, I mean, it is of course weather-related, but not maybe as weather-related as sort of other winter jackets because the Alpine Collection is more correlated to people traveling to the Alpine resorts rather than temperature.
So maybe not that high correlation with the weather for that specific segment. What we can say is that this is the third season that we have a specific Alpine Collection. The first year, we had sales of roughly for a season, I would say, because the season goes into the current quarter as well.
We saw sales first year after launch of around SEK 30 million. Second year, last year, it was around, if I remember correctly, SEK 100+ million. We see growth in this season also compared to last year. That also looks promising. The season is not over yet, so to speak, when it comes to the Alpine. It goes into February as well.
Perfect. Thank you for clarifying that. I think you also mentioned slightly, but also now that we are a quarter down the road, is there anything else you want to add to the reception of the Ultra Series?
I think it has been well received. Sorry. It has been well received. It was a good launch. However, it is volume-wise in relation to our total sales. It's a small collection. It was more a brand-related launch. So I don't think that one should financially expect that collection to have a big impact on total sales. But hopefully, long- term, it will have a bigger impact on brand. And we can show customers and the market that we are also able to produce products that can be used in tougher conditions, even more premium material, more minimalistic design, and so on. So it was more of a project of stretching the brand. And maybe one should not short-term expect a big impact on numbers from that collection.
I see. Regarding your OpEx and cost control, you clearly have a solid grip on your cost base here. I'm guessing there's some improved efficiency in your marketing activities. Do you see this level of cost control as sustainable moving forward? I mean, also now launching new products and product categories, and also you're seeing high growth again in the rest of the world. I assume that you would need to put some more effort into marketing as well. Or how should we view it going forward?
Yeah, we have seen, and I think we mentioned that in the Q1 report, and we see that also in this report that we have been able to see higher efficiency when it comes to marketing. That is, of course, a big cost item in the P&L that is important. Our ambition is to always maintain cost efficiency across the line. But at the same time, also balance that we want to continue to grow market position and continue to grow our top line and sales. We have a target to maintain and operate with an EBIT margin of 20% on an annual basis. So you can argue that the business model is scalable, but if we can just maintain that, that will indirectly mean that we sort of continue to invest in growing the business at the same time.
Perfect. Thank you. Last question from my side. Last but not least as well, I mean, Haparanda might not have been the first place on everyone's radar for a new store opening. What was the logic behind choosing that specific location?
It's actually pretty simple. If we look at our heat map on where we have highest sales per capita, actually in the world, in Europe, we have highest numbers in the northern part of Sweden and in the northern part of Finland. So that is actually the area where we have the highest degree of popularity and highest market share. So even though the population is, of course, smaller than in big cities or big areas, we were offered an opportunity. And yeah, we chose to sign a lease agreement based on that opportunity, which we felt were pretty competitive and interesting.
And we know that it is just on the border between Sweden and Finland. And there is actually a lot of business being done in that area. It is a store neighbor with another big store called IKEA, and the other neighbor is somebody called Systembolaget. We feel that it is a very interesting location also.
Yeah, really, really interesting. And I assume also, given that you opened up another new store, that the first two are developing quite good, I assume.
Yeah, we are very satisfied with the opening of both the outlet store and the brand store in Stockholm that was actually open in this quarter as well. So it has been a very promising start. And I think I mentioned last time we took a quarterly call that we are evaluating more retail opportunities. We do believe that it adds value as a complement to our e-commerce business. And so I think one can expect a couple of more stores over the upcoming years to be opened. Having said that, e-commerce is definitely our main channel.
Perfect. Thank you very much, Paul, Jesper, for taking my question. That was all for now.
Thank you.
The next question comes from Victor Hansen from Carnegie Investment Bank. Please go ahead.
Hi, Paul and Jesper. Victor here. A couple of questions from my side. Firstly, Germany. So the market data has been quite weak for Q2 while you posted impressive double-digit growth. So I'm wondering if you could give us some more flavor on what's driving your growth here in Germany. Any silver bullets?
Unfortunately, not. I think it boils down to a lot of details and well execution in operations and hard work. Good team, strong team. But I think that we simply have a very competitive offering that seems to be very appealing to the German market, but also Austria and Switzerland. And we continue to have good momentum in Germany while we at the same time see that the market conditions are a bit challenging in Germany for sure. So no silver bullet, more hard work, going to the office every day, doing more or less the same thing, and try to do it better and better every day.
Okay, understood. If we switch over to orders, it grew 6% while your average order values were flat, which means up 5% adjusted for FX. I'm wondering how you want to prioritize between these two items going forward, AOV and order growth.
First of all, we have to recognize that the AOV that we present is in SEK. So you have an underlying growth in euro, which is the predominant currency for orders placed during the quarter. Obviously, we want to increase sales both in terms of number of orders and always increase average order value. That is a primary driver of profitability. So there is no difference between the two items. We want to grow both, definitely. But bear in mind the difference between SEK average order value and the underlying euro average order value.
Yeah, yeah, for sure. Final question from me. Also a bit on the FX thing. So the gross margin trend has been negative for eight of the last nine quarters if we look year-on-year. And this should partly be due to mix as well. In the report here, you again mentioned that the weaker US dollar should support your product margins ahead. So I'm wondering, will you invest this extra product margin in, for instance, price or marketing, or should we expect your margins to improve from the weak dollar going forward?
I mean, if I understand the question correctly, we don't base tactics or daily operations so much on currency fluctuations. That would add too much complexity to operations. I think currency movements or fluctuations is what it is, not something that we can control. I think that it's better that we focus on what we can control. Yeah, we have seen that the gross margin is slightly lower than last year. It is mostly related to a lower euro as we report in SEK. But going forward, as you mentioned, we do expect the weaker U.S. dollar to come into effect. But that takes longer time because you have to turn around the whole warehouse. And it's also related to when we actually pay those invoices. So, for example, we have just finalized purchase orders for the autumn-winter season.
Those products are expected to come into the warehouse late spring during the summer. So it takes time. The vast majority of the warehouse consists of products included in the running assortment. So those products are sort of specified as never-out-of-stock products. It will take some time, but gradually, of course, we do expect that lower U.S. dollar to come into effect also into the gross margin, keeping everything else fixed.
Okay. Thank you very much. That's all for me.
Thank you.
The next question comes from Nicklas Skogman from Nordea. Please go ahead.
Yes, good morning. Two questions on the gross margin. If we think about the net benefit and filtering through when you have sort of the dollar weakness fully into your COGS and then the euro SEK not being as negative as it's been in the past couple of quarters, we're looking on your fiscal Q4 seeing a pretty big impact on this. Is that correct? What are you thinking?
Well, the U.S. dollar, I mean, that impacts our purchase cost. The gross margin is obviously impacted by other things such as market conditions, I don't know, potential price reductions in the market. Euro is an important factor as most of what we sell is in euro. Average order value is another. And the basket composition, we have, for example, higher gross margins when it comes to pants compared to footwear. So it also depends on how successful the different product categories perform. But I mean, keeping all other factors fixed, we can see today, for example, that the U.S. dollar in comparison to the SEK is almost 20% lower. So that is obvious, and that will affect the purchase cost if it remains at this level.
And also bear in mind that we have a continuous forward development on the currencies, which will continue affecting our top line and gross margin. So we have a picture of what it is today. If the euro and the dollar develops in different directions going forward, that will obviously also have an impact. But underlying, we benefit from the U.S. dollar weakening more than the euro.
As you can imagine, it's extremely hard to guide on where the currency of what that will mean for us.
I'm just thinking where we stand today, but that's good enough. On the gross margin topic, how is the sort of campaigning intensity now? Is it more than a year ago or less than a year ago?
I would say generally on the market, levels are more or less the same. However, we did see November is an important month during the quarter, and we did see some sort of shift during November. We saw that many of the players on a general basis actually were more active during the full November rather than only Black Friday and Black Weekend or Black Week. So it was clear, and I think that can be also confirmed from other verticals online, that it has been more spread out during November. So that was a shift. However, the most aggressive campaigns were more or less in line with last year. Not more, but not less.
Correct. Thank you. Then could you give some flavor on the rest of the world countries? I see you're growing there 10% in local currency if we strip out the U.S., which is obviously facing some challenges of its own.
Yeah, I mean, the biggest countries in that region, it is U.K., Netherlands, and Poland. That is also the markets where we focus the most. What can we say about that performance? I think, I mean, U.K. is also highly impacted by currency. But Poland and also Netherlands are performing very well, almost in line with the Austrian growth in the quarter. That is also promising.
And then lastly, going back to Switzerland, any insight into why it's going so well there?
One insight is maybe more related to the popularity or the momentum we have in the other German-speaking countries, Austria and Germany, is that if you deep dive into the Swiss business, it is clear that we are getting momentum and we are seeing strong performance in the German-speaking part of Switzerland, but much lower or not so good performance in the French part of Switzerland. So that is an interesting reflection, sort of confirming that we are strong in the German part of Europe.
Sounds like it. Okay, thank you very much.
Thank you.
There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.
Thank you, operator. Before we wrap up, let us see if we have received any questions online. If we have, I will ask Jesper to read a question and then see who will answer.
Yes, we have received a few questions. We'll start from Medium Invest in Denmark. How do RVRC balance growth, marketing spend, and profitability? Basically, are we going to spend everything above the 20% EBIT margin on marketing and growth, or would we increase EBIT margins? How do we balance this mix?
Yeah, I think the short answer is that we want to, we strive or we aim to grow 20%. That is an ambitious objective or ambitious target. We are not really there yet, but that goal, that target was set under the assumption that the market should be somewhat normalized going 2%-4% or something like that. So bearing that in mind, the 11% in local currencies is not that far away from those 20%. But also at the same time, balance investments in growth with maintaining the profitability level or adjusted EBIT margin of 20%. And looking at the last 12 months, we just passed SEK 2 billion and delivered an EBIT of SEK 400 million. So we are more or less both on that annual target.
So we are over, sort of. We are focusing investments in markets where we believe that we still have strong growth opportunities, but at the same time. So yeah, keep over-investing some EBIT margin, you can say.
We have another question from the same source on why the weakening US dollar is not more visible in the gross margin. We've discussed that. We also see the weakening euro. Obviously, the impact from the USD is delayed when we turn the entire inventory over. Given today's currency rates, we will see the impact going forward during the year. But then currencies are dynamic every day.
Yep. Thank you. Nothing to add there.
We have a question from SB1 Markets, Norway. If we can share some insights on new upcoming product innovations and categories beyond the winter running cross-country skiing.
Yeah, I think maybe one important example to highlight or to mention is that we will focus on when it comes to product development and further develop some of our best- performing products. One example is one of our best-selling outdoor pants are being updated with additional length options. I think that can have a good impact both for customer satisfaction and for sales. That has been a high demand for that for some years. And we've listened into that. And that is something that we will launch in the upcoming months. So continue to work regularly with new products, but also further develop existing product lines.
We have from the same source a question on January sales. We have commented on that. I've parked that question. Then what is your view on the U.S. market going forward if tariffs on small packages from China actually be positive for competition? But U.S. going forward.
Yeah, I can start by saying that the U.S. market is the biggest outdoor market in the world. Long- term, our ambition is to also get a position in that market. If we look back, we had good momentum after the launch in the U.S.. We can also see a high interest in our, for example, social media follower base. So we believe that U.S. is still a big opportunity for us. We had an infrastructure earlier, meaning that we could actually send products from Europe on order basis. And after the new tariff situation, we had to readdress or revisit the logistical setup. But our ambition is to get the new setup up maybe after the summer or something in a couple of months so that we can sort of start to push that button again.
And I mean, tariff is not long-term necessarily a big problem for us because it will actually affect the whole market and competition as well. So I think as long as everybody will be treated on an equal basis, I think it's more boils down to us and other companies to find the right setup when it comes to the full supply chain. So we are addressing it. It will take some time, but for sure, U.S. is a huge opportunity for us. And we have also seen just a year ago a very high interest and good momentum in the U.S. market. So hopefully we will come back, and that is also our ambition.
Okay. We've got another question also from Norway by the looks of it. If we could say something about the effect of AI, both with regard to internal efficiency and not least AI agents and the effect of those on shopping online.
Yeah. We have a couple of AI projects that we are working on internally, and we have split them into, well, two or three different buckets. One is, of course, sales related and making sure that we have high visibility on important platforms such as LLM platforms such as ChatGPT, Google AI. We also see that they are launching initiatives facilitating checkout on those platforms. That is something that we are looking into. But we have also launched a number of projects internally in order to increase our operational efficiency based on AI technology. So we have a SWAT team working on different kinds of projects internally related to AI.
Okay. And then what appears to be the final questions, and I'll merge these coming from various Norwegian investors. It's a bit on the DACH region and not so much on Germany, but Switzerland and Austria. If we can share anything on the size of those two markets, the return rates in those markets compared to Germany. And yeah, exactly. So a bit more detail on Austria and Switzerland compared to Germany.
Yeah. Size-wise, I think, if I remember correctly, Germany has a population of 80 million, Austria 10 million, Switzerland 10 million. So in total, the DACH region is a market for us of around 100 million. Right now, we are not that big in the French-speaking areas of Switzerland. But you can argue that Austria and Sweden are pretty similar in terms of size. In terms of return rates, very high level. Germany is the market of the markets where we operate that we see the highest return rates. So both Austria and Switzerland have lower return rates compared to Germany.
So I think that our performance and momentum in both Austria and Switzerland are promising and can also have a significant impact going forward. So that's very promising. And we understand that we have another question from the operator.
The next question comes from Benjamin Wahlstedt from ABGSC. Please go ahead.
Good morning. Sorry, I must have misdialed earlier. I want to revisit one of, I believe, Emanuel's questions. Could you elaborate on the per- month growth in Q2 or say anything about the intra-quarter momentum, please?
Yes, I can do that. I think growth-wise, slightly lower in October, but growth. And that is also something that we mentioned when we launched the latest results. But the months were pretty similar, slightly higher in November and maybe slightly, slightly lower growth in December compared to November, but no big deviations. I would say that this 11% was, yeah, it was pretty close intra-quarter as well. But slight differences, slightly lower in October, higher in November, and slightly lower in December again.
All right. Perfect. Sort of perhaps following on that question as well then, this is the second quarter in a row where you do not comment or give any sort of indication of the magnitude of growth. While I appreciate that going into Q2, November is by far the biggest month, you might not necessarily tell us anything by commenting on October growth. Is that the case in calendar Q1 as well, or why the change, so to speak?
Yeah. The dynamics in our third quarter, or the calendar Q1, is pretty much the same, actually. So we have the highest season in front of us. Normally, March is the best month of this quarter. In fact, historically, we have actually seen that March is the second biggest month for a full year. So that's one thing. But historically, we have never provided guidance. We have only disclosed what we know. And I mean, looking back to what we said last time, we said, I think, the same thing that we're saying today, that we see growth. And as you can see, what we are delivering today is 11%. But we don't provide guidance, but of course, that is something you can see that we have done before.
Yep. Thank you. Finally, for me, have you been able to see any change in order volumes from the Stockholm region sort of after the Kungsgatan store opening?
If we have seen any?
Is it possible to talk about the halo effect or?
Not really. I think it's too early to call that. I think we have had a store open for three months. So maybe I'll have to come back on that. I simply don't have that data in front of me whether we can see that halo effect specifically in Stockholm.
I understand.
In terms of order value.
Yeah, I understand. Finally, I was wondering if you could elaborate on the inventory level. Year-over-year, you're down 17%. And I was wondering what part of this can be explained by a soft dollar and what share can be explained by a lower sort of volume of garments?
I would say the majority can be explained by volumes. And I think we guided a couple of quarters ago that we should expect the inventory to come down gradually. And that is what we have seen now. So now we are very satisfied with the size of the inventory and also the composition of the inventory. It was a bit high in order to facilitate even higher sales, but we were sort of, even if it was a bit higher, we were always comfortable with the composition. And the reason is that 80% of our sales consists of products that we include in what we call the running assortment. So we have a very low degree of high-risk trend-related products. So yeah, but the answer is more volume-based rather than currency-related.
Have you made any changes in how you stock products? I'm talking about the number of colors or anything like that.
I mean, no big changes, but I think mentioned always, we always try to optimize and be more efficient both when it comes to operations, but also inventory management, inventory planning, and working with the full supply chain. So no big changes, rather than daily operations and daily optimizing.
All right. So you're just leaner and meaner. Thank you very much. That's all I had for now.
Thank you.
There are no more questions at this time. So I hand the conference back to the speakers for closing comments.
Thank you, operators. So with that last comment, I would like to say thank you all for joining us today and for your interest in our journey. May I also remind you that the report for our third quarter will be announced April 28th. So with that, thank you and goodbye.