Swedencare: net sales and profit grow in Q2

Malmö-based pet care company Swedencare posted a 4% year-over-year (YoY) growth in revenue in the second quarter of fiscal year (FY) 2026, ending 30 June, to SEK 670 million ($69M/€60.5M). The figure also represents an acceleration from the 3% rise registered in the same period last year and the 1% increase in Q1 2026. 

The strong second-quarter results helped the company record a 3% increase in first-half (H1) revenue of SEK 1.3 billion ($136M/€119.4M).

Organic growth in Q1 was 7%, in line with last year’s results, bringing H1’s results to 9% YoY. According to the company, “This is the first quarter since 2019 without acquired growth.” 

Performance by segment

For the second consecutive quarter, the production segment – which comprises manufacturing capabilities and expansions – registered the highest organic growth at 25%. The segment represented 20% of the company’s sales, and its growth was driven by the expansion of contract manufacturing in Europe and the pharma product group.

The European segment, which accounted for 25% of the company’s revenue, increased organic sales by 19%. While dental was the fastest-growing product group driven mainly by sales on Amazon, the European market also benefited from export sales to markets managed by distributors, with strong results in China. 

North America represented the largest portion of revenue (55%), but performed poorly in the quarter, with a 3% decline in organic sales. Swedencare attributed the result to a delayed product launch with a significant new retailer.

“The merger of the two largest distributors within the veterinary segment in the US has also negatively impacted the segment, as they reduced their inventory levels during ongoing negotiations,” the company says, likely referring to the deal between Covetrus and MWI Animal Health announced in February. 

Highlights and headwinds

In terms of products, sales growth was driven by the dental group, whose ProDen PlaqueOff® delivered a strong quarter across all segments, and pharma, with positive performance in the Production and European segments. 

The company also highlighted the launch of its brand of pet nutritional supplements and vitamins, NaturVet, in Europe during the quarter. 

But the overall economic pressures affecting consumers worldwide also weighed on results, according to CEO Håkan Lagerberg. “In May in particular, consumers were more cautious, visibly affected by fuel prices and general economic uncertainty. However, the quarter finished in a more positive way,” he says. 

Profitability

Operational earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to SEK 129.4 million ($12.3M/€11.7M) during the quarter. The 5% YoY rise boosted the EBITDA margin to 19.3% compared to 19% during the same period in 2025.

In H1, operational EBITDA came to SEK 257.1 million ($26.5M/€23.2M). The figure corresponds to an increase of 4% YoY, leading to an EBITDA margin of 19.5%.

The company was able to reverse a net loss in Q1 2025 into a net profit of SEK 23.7 million ($2.4M/€2.1M) in Q1 2026. For H1, net income came to SEK 41.5 million ($4.3M/€3.7M).

Gross margin also expanded in the quarter to 61% from 55.1% a year ago. Growth in the European segment, “where margins are higher compared to others,” is part of the reason, together with inventory build-up, the CEO says. 

Guidance

The company expects business in the US to improve in the second half of the year, as the delayed order will be completed in the third quarter, and forecasts high single-digit to low double-digit company-level growth.

“We definitely expect margin going up Q3 going forward. It’s absolutely related to our Amazon costs both in Europe and the US,” Lagerberg said during the earnings call. 

The e-commerce platform accounts for the largest portion of the company’s online sales but, according to the CEO, many sellers on the platform were not following its minimum advertised price (MAP) policies. 

“We got them under control now. Over the last quarter, we’ve put a number of processes in place to get our Amazon business back on track through renewed discipline around MAP enforcement, enrolling key SKUs in the Amazon Transparency Program to effectively address rogue sellers, and a storefront refresh,” Lagerberg told investors.

The company also expects better margins in the next quarter driven by new veterinary partnerships and inventory build-up, especially for the dermatology product category.