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Axfood Misses Q2 Revenue and Profit Forecasts on Food Price Deflation
Swedish grocery retailer Axfood announced second-quarter revenue and operating profit that missed analyst forecasts, as the company contended with food price deflation and adverse calendar effects.
Second-Quarter Performance
Axfood's top-line growth was modest, failing to meet market expectations. According to the company's report, operating profit also came in below the consensus estimate from four analysts.
Key figures for the quarter include:
- Revenue: SEK 23.2 billion, an increase of 0.9% year-over-year, but below the SEK 23.67 billion consensus estimate.
- Operating Profit: SEK 964 million, missing the analyst forecast of SEK 1.008 billion.
- EBIT Margin: 4.20%.
- Net Income: SEK 647 million.
- Adjusted Earnings Per Share (EPS): SEK 2.94.
AdDeflation Weighs on Growth
The company attributed the weaker-than-expected growth directly to food price deflation, a market condition where the average price of food items decreases. This can pressure a retailer's revenue even if sales volumes remain stable or increase. Axfood also noted that calendar effects contributed to the soft results.
Despite the headwinds, Axfood's Hemköp chain delivered 7.4% growth and gained market share, signaling strength in that segment. The company stated it is maintaining its goal to achieve profitability at its City Gross chain during the second half of 2026 and will continue to implement strategic measures to strengthen growth, optimize logistics, and improve cost-efficiency.
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