RVRC Holding AB (publ)

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 and our financial year starts 1st of July and ends the 30th of June. So Q2 means the period from October 1st to December 31st. My name is Paul Fishbein and I am the CEO of Revolution Race and 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 Revolution Race story, I will start by giving you a brief introduction. Revolution Race 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, Revolution Race, 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. And today we have more than 2 million followers on those platforms and over 750,000 reviews on our site, product reviews. Revolution Race was founded in 2013 and launched in 2014 and we have been listed on Nasdaq Stockholm since 2021. Our headquarter 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. So 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 Revolution Race history. Net sales over the rolling 12 months, that means the full year 2025, passed for the first time 2 billion Swedish krona and that is of course a milestone for the company. Net sales in the second quarter amounted to 726 million Swedish krona 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 Corona as the majority of our sales are generated in other currencies than SEC. and for example we have 75 to 80 percent 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 one million SEK and compared to a positive item of five million SEK last year. So only here the difference amounts to six million compared to last year. So 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 the largest market grew by 11% in local currency, while sales in Austria and Switzerland continue to perform very well. In the Nordics sales growth increased by 6% in local currencies and also yesterday we saw the Swedish spot index data. 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. And 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 US, this rest of the world region would have grown by 10% in local currencies. And currently, we are not focusing on our US sales since we are revisiting our logistics setup. in order to match new tariff conditions but we hope to be able to again focus on us later this year um Let's continue to look closer at the second quarter and we continue to deliver strong industry leading margins. And 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 and amounting to 180 million Swedish krona, 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 reported in SEC. We can move on and look at cash flow. Cash flow from operations was strong in the quarter amounting to 360 million Swedish krona. We continue to maintain as a result a solid financial position with a net cash position of 341 million Swedish krona. And that's actually despite having distributed dividends of 143 million during the quarter. And on top of that, we also repurchased shares for 39 million Swedish krona 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. And 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 outer pants, which are being updated with additional length options. And 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, and good morning, everyone. I will briefly cover the financial performance during the second quarter of the financial year, 25-26. Gross profit amounted to 506 million SEK for the quarter compared to 481 million a year ago and 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 or physical stores, but personnel expenses as share of net sales were in line with those of the same quarter last year. Other external expenses came in at 287 million compared to last year of 290 million, a slight decrease. And as a share of net sales, that was approximately 40% and obviously lower than last year. Adjusted EBIT for the quarter amounted to 180 million SEK compared to 162 million SEK a year ago. And the EBIT amounted to 177 compared to 158 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 2 million SEK 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 SEC denominated expenses. So the underlying currency adjusted result has some upward potential compared to the reported and adjusted EBIT for the last 12 months amounts to 418 million. As Paul said, the balance sheet remains stable. Changes in line with seasonality, networking capital decreased to 81 million compared to 118 a year ago. And changes in networking capital is primarily driven by lower inventory levels and the decrease in current liabilities. The inventory amounts to 494 million at quarter end of which 378 was goods in warehouse compared to a total of 592 million a year ago. Goods in transit has decreased from 161 million to 88 million. And ahead of the quarter, we carried out the planned inventory build up to meet seasonally higher sales volumes. And we're now satisfied with the inventory levels. Our financial position is strong and we had a solid cash position of 358 million at quarter end and a net cash position of 341 million adjusting for lease liabilities. The credit facility of 600 million SEK remains available and undrawn. Cash flow from operating activities came in at a strong 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 to 60% of net profit annually in accordance with the dividend policy. And as a result of the company's continued growth and strong financial position, the AGM in November, we sold on a dividend of 1.35 sec per share for the previous financial year, which implies a growth of 13% compared to the dividend of 120 a year ago. The dividend in total amounted to 143 million. And 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 39 million SEC. 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. And with that, it's over and out for 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 linear 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. and that concludes our comments on the result and 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 and with that we are now happy to answer questions so we have a question to the operator yeah 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 Emmanuel Jansen from Danske Bank. Please go ahead.

Good morning, Pauline. 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 U.S. And I know it's still early days into the reporting season. I think I touched a little upon it, Paul, already. But we saw we have corpse number yesterday. But I wonder if you could maybe touch a little bit more on the broader market development in this quarter versus the previous one. How do you think that has developed?

Yes, hi Emanuel. So yeah, I'm sure you saw that also we received the data from the Swedish Trade Association reporting the spot index data and also they disclosed the performance of the outdoor industry. And we have seen over the last two, three, four years almost every quarter a decline. I think the Canada Q2 was actually an exception where we saw an increase in the market. It is difficult to estimate where the market will we'll 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 it continues to be tough we had only two percent growth in sweden and but compared to the spot index data it was down um nine percent so you can you can argue that we are actually growing by roughly 11 in sweden compared to the market um We see on an overall basis that we continue to grow in January. That is what we are disclosing today. We don't provide any guidance and as I also mentioned the world it's very difficult to sort of assess where the market will head from now. And we also, on top of that, we operate in so many markets. And I guess you also saw some data from Germany, for example, reflecting the market performance in Germany in December. They were also pretty weak. So hopefully it will turn around and be stronger. But having said that, for us, We believe that we are very well positioned. We feel that also in tough market conditions, we have a strong offering. And 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 performers during this time period?

Yeah. 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% plus 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. 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.

we can sort of can highlight that those two markets that's very strong performing markets thank you very much and considering that we had a fairly mild winter here in in the nordics at least i'm curious about the the alpine collection that you mentioned it was such a hit last year how has that performed this time around and order any other categories that you would like to highlight And 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 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. And we saw a sales first year after launch of around 30 million second year. Last year it was around, if I remember correctly, 100 million plus. And we see growth in this season also compared to last year. So that also looks promising. But 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 it 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, if this volume wise in relation to our total sales, it's a 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 the customers in 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 big impact on numbers from that collection.

I see. And regarding your OPEX and cost control, you clearly have a solid grip on your cost base here. And 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 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 a higher efficiency when it comes to marketing and that is of course a big cost item and in the P&L that is important. Our ambition is to always maintain cost efficiency across the line and 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 and 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.

And last question from my side and 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

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 we choose to sign a lease agreement based on that opportunity, which we feel were pretty competitive and interesting. And we know that it is just on the border between Sweden and Finland. And there's actually a lot of lot of business being done in that area it is a store with neighbor with another big store called ikea and the other neighbor is somebody called system blogger so we feel that it is a very interesting location also yeah really really interesting and i assume also uh giving that you open up another new store that the the the first two has are quite Yeah, we are very satisfied with the opening of the both 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 Ingersoll, for taking my question. That was all for now.

Thank you.

The next question comes from Victor Hansen from DNB Carnegie. 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 impressing 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. 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 a good momentum in Germany while we at the same time see that the market conditions are a bit challenging in Germany, for sure. 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 we want to prioritize between these two items going forward, AOV and the order growth.

First of all, we have to recognize that the AUV that we present is in SEC, so you have an underlying growth in Euro, which is the predominant currency for orders laid or orders put during the quarter. Obviously, we want to increase sales both in terms of number of orders and always increase average order value. That is the 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 SEC average order value and the underlying Euro average order value.

Yeah, for sure. Final question from me, also a bit on the FX theme. So the gross margin trend has been negative for eight of the last nine quarters, if we look even here. 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. i'm wondering will you invest this product this extra product margin in for instance price or marketing or should we expect your margins to improve from the week 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. 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 SEC. But going forward, as you mentioned, we do expect the weaker US dollar to come into effect. But that takes a longer time because you have to turn around the whole warehouse and it's also related to to when we actually pay those invoices. So, for example, we have just finalized purchase orders for the autumn-winter season, and those products are expected to come into the warehouse late spring, during the summer. So it takes time and 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 product. So it will take some time, but gradually, of course, we do expect that lower US 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 Nicholas Skogman from Nordia. 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 EURUSD not being as negative as it's been in the past couple of quarters, we're looking on Q4, your fiscal Q4, seeing a pretty big impact on the stats. correct way of thinking.

Well, the US 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, price reductions, 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. keeping everything all all other factors fixed we can see today for example that the us dollar in comparison to the sec is almost 20 lower so that is yeah that is obvious and that will affect the the purchase cost if if it remains at this this this level and also bear in mind that we have

but continues 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 US dollar weakening more than the euro.

But as you can imagine, it's extremely hard to guide on where the currency affects, 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. it was clear and i think that can be also be confirmed from other verticals online that it has been more spread out during november so that was a shift uh however the the most aggressive campaigns were yeah more or less in line with last year not more but not less all right thank you and then could you give some flavor on the rest of world country

I see you're growing there 10% in local currency if we strip out the US, which is obviously facing some challenges of its own.

Yeah, I mean, the... The biggest countries in that region, it is UK, Netherlands and Poland. And that is also the markets where we focus the most. What can we say about that performance? I think, I mean, UK is also highly impacted by currency, but some Poland and also Netherlands are performing very well, almost in line with the Austrian growth in the quarter. So that is also promising.

Okay, 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 uh 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 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.

And thank you, operator. Before we wrap up, let us see if we have received any questions online. And if we have, I will ask Jesper to read a question and then see who will answer.

Yes, we have received a few questions. So we 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? So 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're not really there yet, but that goal that target was set under the assumption that the market should be somewhat normalized going two three four percent 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 2 billion and delivered an EBIT of 400. So we are more or less spot on that annual target. So we are focusing investments in markets where we believe that we have still have strong growth opportunities but at the same time so yeah keep over investing some EBIT margin you can say

And we have another question from the same source on why the weakening US dollar is not more visible in the gross margin. And we've discussed that. We also see the weakening euro and obviously the impact from the USD is delayed when we turn the entire inventory over so given today's currency rates we will see the impact going forward during the year but then currencies are dynamic every every day yep thank you nothing to add there we have a question from sb1 markets norway um if we can share some insights on new upcoming product innovations and categories beyond the winter running cross-country skiing.

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. There 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. 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. So I parked that question. And then what is your view on the US market going forward if tariffs on small packages from China actually be positive for competition, but US going forward?

I can start by saying that the US 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 US. We can also see a high interest in our, for example, social media follower base. So we believe that with US is still a big opportunity for us. We had an infrastructure earlier, meaning that we could actually send products from Europe on an audit 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 down to us and other companies to find the right setup when it comes to the full supply chain. We are addressing it. It will take some time, but for sure, US is a huge opportunity for us. And we have also seen just a year ago, a very high interest and good momentum in the US 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 SWOT team working on different kind 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. Yeah, exactly. So a bit more detail on Austria and Switzerland compared to Germany.

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 Dutch 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 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 Wallstedt from ABGSC. Please go ahead.

Good morning. Sorry, I must have miss-dialed earlier. So I want to revisit one of, I believe, Mano's questions. Could you elaborate on the per month growth in Q2 or say anything about the inter-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. 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 into a quarter as well. But slight differences, slightly lower in October, higher in November and slightly lower in December again.

Oh, right. Perfect. and 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 and while I appreciate that you know 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?

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 we... 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.

Thank you. Finally, from me, Have you been able to see any change in order volumes from the Stockholm region, sort of after the Kungsgatan store opening? Is it possible to talk about the halo effect?

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 informed to me whether we can see that halo effect specifically in Stockholm.

I understand.

In terms of water value.

Yeah, I understand. Finally, I was wondering if you could elaborate on the inventory level. So year on 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 one 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, we were, 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 product that we include in what we call the running assortment. So we have a very low degree of, you know, 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 like the number of colors or anything like that?

I mean, no big changes, but we, 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. It was 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, operator. 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 also remind you that the report for our third quarter will be announced April 28th. So with that, thank you and goodbye.