Swedencare performs below expectations in Q1 2024
The Swedish firm is to expand its European portfolio and increase production capacity.
In the first 3 months of 2024, Swedencare generated net revenue of SEK 597.4 million ($54.7M/€51.1M), a 14% year-over-year (YoY) increase.
The company’s profits after tax amounted to SEK 30.1 million ($2.7M/2.5M) this quarter, compared to SEK 17.2 million ($1.5M/€1.4M) in the first 3 months of 2023.
Swedencare saw 12% organic growth this quarter, which is “slightly lower” than expected. Its CEO Håkan Lagerberg attributes this to the transition to self-controlled Amazon sales in the UK, management of spring product launches and large order delivery delays to the next quarter.
In 2023, the first quarter was the company’s “strongest ever,” with a 39% YoY increase in revenue to SEK 523.2 million ($47.9M/€44.7M).
NaturVet’s European debut affected growth
Swedencare’s health and wellness brand NaturVet, currently available in the US, will launch in Europe on 7 May.
The company admitted that the relocation and expansion of soft chew production in Europe harmed Q1 2024’s growth in the production segment. However, it is expected to increase capacity by May and subsequently grow throughout the year.
Lagerberg clarified to investors that several brands, such as Innovet Pet, Pet MD, Garmon/NaturVet, and Vetio UK, had a “very strong start to the year.”
Swedencare’s subsidiary business, Pet MD Brands, completed the remaining 70% acquisition of treat and pet care company Riley’s Organics earlier in January in a bid to reduce the company’s debt.
For the 2023 financial year, Swedencare’s net revenue stood at SEK 2.3 billion (€200M/$217M). Its biggest markets were North America (79%) and Europe (18%), followed by the rest of the world (3%).
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