Tokmanni Group Oyj (TOKMAN) Earnings Call Transcript & Summary

Good morning, and welcome to Tokmanni Group's Third Quarter 2025 Results Presentation. My name is Mika Rautiainen and during this presentation, I will first go through the key facts for the third quarter. And after that, Tokmanni Group's CFO, Mr. Tapio Arimo will come and present the financial figures in a little bit more detail. And after that, it's time for questions. So after the first half, a difficult first half of 2025, Tokmanni Group had a twofold quarter. On the other hand, in Finland, Tokmanni segment had record high revenues and also EBIT and at the same time, we could say from Tokmanni segment that we're -- after this difficult first half, we're back on track. But unfortunately, the transition period takes a little bit more time in Dollarstore in Sweden and in Denmark. And Dollarstore's result declined, and that was, of course, a disappointment. So let's take a little bit closer, look at this. Yes, this is a familiar slide. Last year, during the third quarter, Dollarstore's share of the revenues was 26%. So now it's slightly higher with 27%. Two more -- 2 new stores compared with the end of June situation. About the group and the key facts during the third quarter, Tokmanni Group's revenue increased by 4%, which was taken into consideration the market situation, well, satisfying sales result. Tokmanni segment's revenue increased due to a good end of summer sales. Basically, in Finland, we didn't have like a real summer until the end of June. So actually, for the inventories for summer, spring and summer products, it was very good that July was actually a very nice summer. So we were able to also do a very good sales for the summer products. And at Dollarstore segment, the customers purchased more higher-value items. Basically, the share of Tokmanni private labels increased very well. And these are, of course, it's not like entry-level products there more towards best value for money products. Anyway, this resulted in an increased basket size. The gross margin percentage declined, especially due to Tokmanni segment's heavy summer clearance sales, what we were actually taking through, especially in July and in the beginning of August. Cost management was very successful in Finland, but expenses at Dollarstore segment increased due to the opening of the new stores compared with previous year. And of course, during the fourth quarter, we also are opening 4 new stores in Sweden and in Denmark. So obviously, all the preparation costs for these new stores came to the third quarter. The group's EBIT was lower than in the previous year and as the gross margin percentage declined and due to Dollarstore segment's cost, they were increasing. So let's take a look at the Tokmanni segment. Comparable customer visits increased by 1.3% and like-for-like revenue by 1.5%. So the average basket size increased by 0.2%. Grocery sales increased by 2.5%, and actually this is for the first time for several quarters where the non-grocery sales actually grew faster compared with groceries. And that was 4.3%. This was mainly due to the fact that, especially in July and beginning of August, we were selling the summer products with big discounts. And that, of course, was successful sales. Gross margin-wise, it wasn't that good, of course. As I said over here, it's the comparable gross margin percentage declined by 1 percentage points, mainly due to the discount sales of summer and spring season products. Operating expenses decreased due to successful cost control, particularly the focus was on the personnel costs and marketing costs, and that was well managed by the team. And Tokmanni's EBIT improved and actually it was on the record high level. So from Tokmanni Group's perspective, of course, it was good that we were able to get segment back on track. But then when we look at the -- well, before we look at the Dollarstore, something regarding the store network. Yes, we still continue to expand also in Finland. During the third quarter, we actually closed one store in Turku and opened a new store in Kemiönsaari. Now during the fourth quarter, we've already opened a store in Naantali, and we will be opening a new store in Tuusula and also a new bigger store. It's a relocation in Nilsiä, Kuopio. In the middle of January this year, we signed a license agreement with SPAR International. And at that time, we also basically told to the market that we will start testing the EUROSPAR supermarkets in 3 stores in Finland by the end of the year. The first store was opened in Ylöjärvi in June, the second one in Masku in October. And last week, we opened a third store in Tornio. It's in northern part of Finland. I have to say that we've been able to get a lot of information learnings from SPAR and of course, something which is like very important for us is that these 3 stores are nowadays and they all are in top 10 stores in Tokmanni. So sales-wise, they've been a success for Tokmanni, we've been getting extremely valuable information. knowledge regarding the grocery business from SPAR International and also from the retail business in general. And this was, of course, one of the biggest targets for the start with the cooperation with SPAR International. And of course, we, at the moment, we have SPAR private label products in all Tokmanni stores in Finland. They've been extremely welcomed by our customers and the sales for these private label products are very good. So actually, we're pretty satisfied with the SPAR experiences with these 3 stores and also the private labels. And next year, of course, for Tokmanni, we will start to roll out for all other grocery stores in Finland. And then it's time to go to Dollarstore segment. Total revenue increased by 6% and like-for-like revenue decreased by minus 1.4%. In local currencies, the increase was 3%. The same story goes with Dollarstore. Actually grocery sales increased by 2.1% and non-groceries by 4.3% in local currencies. Like-for-like average basket size grew by 3.6%. But as already mentioned, there is a transition period going on with Dollarstore. Dollarstore has been known -- very well-known for the entry-level products, which is like a very, very low-priced products with SEK 10, SEK 20. The biggest part of the sales come from SEK 10, SEK 20 products, which is basically EUR 0.90 or EUR 1.80. And yes, we've been replacing these with the best value for money, Tokmanni private labels, which are slightly well, higher priced. And that's, of course, something that has slowed down a little bit, the customers who used to be shopping in Dollarstore, but the aim for Dollarstore basically is that we will get new customers. And of course, one of the key factors that we're trying to improve with Dollarstores, the customer confidence. And with this very well tested and very good quality Tokmanni private label products, we believe that we are able to also improve the customer confidence in Dollarstore. But obviously, these products, the previous entry-level products, especially with some quality issues. These will be taken out from the assortment, and that shows a little bit with the sales in Dollarstore. But at the moment, the assortment of the joint product range for both -- for Dollarstore and Tokmanni, it's more than 4,300 SKUs. I consider this as a very, very good direction. Comparable gross profit improved by EUR 1.5 million compared to the corresponding period of previous year. The gross margin percentage was lower compared with last year. And operating expenses, as already mentioned, increased mainly due to the new store openings and the preparation for the new store openings during the fourth quarter. Dollarstore and Big Dollar in Denmark continue to expand fast, actually. There were like 2 store openings, one Big Dollar in Skive, Denmark or during the third quarter and in Västerås in Sweden for the third quarter, and actually if I said 4 new openings, it's actually 5 new openings during the fourth quarter and Östhammar and the Hälla store in Västerås we've already opened. And there will be like 2 more store openings in Gothenburg and then one more in Guldborgsund Big Dollar store in Denmark during the fourth quarter. So 5 more stores coming before the end of this year. So very active operations in Dollarstore. And this renewed Dollarstore concept is basically part of the transition process that we're having in Dollarstore. Actually, during the third quarter, we launched this pilot store in Sweden to test an assortment of over 30,000 SKUs. Basically combining the approximately 20,000 SKUs from Tokmanni and 10,000 SKUs from Dollarstore. And of course, the target is to test a more unified and attractive product range and especially the unified product range is something what we are seriously looking for with this development. Actually, so we opened this, if I remember correct, it was by the end of September. And this is actually one of the best-selling stores for Dollarstore in total. So it's been very successful. Obviously, the transition is to take Tokmanni and Dollarstore more towards the same product assortment, and even the concepts we are looking for taking to the same direction. And obviously, from here, we have from this renewed concept. We have very good experiences, but we will be opening a couple of more pilot stores to get more information regarding the Swedish and Danish market also for this new concept. But this will be happening in the beginning of next year. So the next one will be Tokmanni Group's key figures, and I will invite Tapio to come over to tell more about the financial figures. Tapio, please go ahead.

Thank you, Mika, and good morning on my behalf as well. So let's dive a little bit deeper into the numbers. So as Mika pointed out, our revenue growth in all in all was acceptable at 4% and reached EUR 432.8 million. Our like-for-like revenue also increased a little bit, 0.7 percentage points. Our gross profit also grew during the third quarter and reached EUR 150.4 million. And like Mika said, our comparable gross margin declined somewhat, and that was really driven mostly by the high summer sales during the July and early August frame at discounted prices. And our comparable EBIT came in at EUR 26.4 million, which is a decline from the previous year and the comparable EBIT margin was 6.1 percentage points. Our cash flow was very good during the quarter, thanks to our good management of our inventories and totaled EUR 31.8 million. And our diluted earnings per share was EUR 0.24 per share. Looking a little bit deeper into our revenue. So as I said, our revenue grew by 4% during the quarter. When you look at the segments, so on the Tokmanni segment side, the revenue increased by 3.5%, decent growth. At Dollarstore, unfortunately, the revenue only grew by 3% in local currencies, and that also means that the like-for-like was slightly negative. On the euro terms, the Dollarstore revenue actually increased by 6%. So we got some positive tailwinds from the exchange rate during this quarter. When you look at our product mix, so that moved in the sort of a favorable way for the first time in some time for Tokmanni segment. So we managed to increase slightly the share of non-groceries during the quarter compared to a year ago. And again, that was also driven by the good sales of our non-grocery products during the July and early August sales period. And at Dollarstore, we also continued to increase the share of non-grocery business, and that is really mostly driven by the increased share of Tokmanni private label products, which are mostly non-grocery products. And our private labels continued to support our growth. So as a total for the group, we did increase the private labels clearly from a year ago. And again, that was mostly driven by the increased share of private label at Dollarstore. And as you can see, we have many private labels that we work with, and we do see a lot of further potential to increase the sales of private label over time, especially at Dollarstore, but also at Tokmanni. Then when you look at our gross profit, as I said, we managed to increase our absolute gross profit from a year ago. But unfortunately, the comparable gross profit margin declined slightly. And for the Tokmanni segment, the gross profit was almost on par, so a slight increase of EUR 800,000 from a year ago and the gross profit margin declined by 1 percentage point. And at Dollarstore, the increase was EUR 1.5 million in absolute terms and also there, the gross profit margin declined slightly, and that was mainly driven by the product mix from the very low products that typically have a slightly higher gross margin to the higher average price Tokmanni private label products. In terms of the comparable operating expenses, a very mixed quarter. So we were working hard to control the costs and at Tokmanni segment, we managed to do that quite well. And the share of operating expenses relative to sales declined clearly by almost 1 percentage point. So from 20.3% a year ago to 19.4%. Unfortunately, Dollarstore the direction was the other way, a quite large increase as a percent of sales, which is partly driven by the let's say, slightly lower sales growth than hope for. And like Mika said, the large number of stores that we have opened during the past year, and also the ones that we have just recently opened or opening, the sort of opening costs contribute to this number. And the total operating expenses for the Tokmanni segment, EUR 61.1 million, which is actually a decline from a year ago of EUR 600,000, which is a very good result. And then for Dollarstore, the operating expense totaled EUR 30 million, an increase of EUR 4.5 million, which was really the key factor driving down there absolute EBIT Dollarstore during the quarter. Then we will look at the EBIT and the EBIT margin. So I said the total comparable EBIT declined to EUR 26.4 million from EUR 29.5 million from a year ago. And that also included EUR 1.1 million of group functions costs, an increase of EUR 300 million over last year. But as Mika said, the Tokmanni segment actually reached an all-time high EBIT margin of EUR 26.3 million during the third quarter and the comparable EBIT margin also increased slightly from a year ago to 8.4%. And for Dollarstore, obviously, a different story. So the EBIT declined to EUR 1.1 million, a decline of EUR 4 million, and the comparable EBIT margin was unsatisfactory at 0.9 percentage points. Then when we look at our inventories, like we said last quarter announcement, we've been working quite hard on inventory management, and that shows good results. So if you look at our 2 previous quarters, the inventory is essentially flat over the last 6 months. And typically, during these 6 months in a normal year, we see a quite significant increase in inventory. So we've actually done a very good job in containing the inventory growth and working very hard to increase the efficiency of our supply chain. And we do see a clear decrease in the fourth quarter as well on the inventories. And the overall inventory level was EUR 477.7 million, which is an increase of EUR 32 million roughly from a year ago. But as said, only a slight increase from a quarter ago and essentially flat with 6 months ago situation. Then looking at our financing. Our total interest-bearing debt, EUR 945.5 million, which is an increase of EUR 100 million from a year ago and a slight increase also from the previous quarter, but the actual net debt that is excluding the IFRS 16 has actually gone down over the past 2 quarters, which we contribute, obviously, mostly due to good inventory management. And the total lease liabilities are, at the moment, EUR 613.3 million, and that's really a reflection of the increase in the number of stores that we have. Then our net debt to comparable EBITDA ratios. The IFRS 16 number was 4.35 at the end of the quarter, a slight increase from the previous quarters. Our financial position continues to be good and net debt, excluding IFRS liabilities, EUR 323 million, an increase of about EUR 50 million from a year ago. And our cash flow, as mentioned before, we're very happy with the cash flow for the third quarter, which stood at EUR 31.8 million and close to the number 2 years ago, and much better than a year ago number of EUR 8.1 million. And this, again, driven by the inventories compared to the comparison period. And for the total for the first 9 months also, we had better cash flow than last year at EUR 31 million compared to EUR 12.1 million a year ago. And our capital expenditure continues to be well under control. Our total for the quarter was EUR 6.6 million, a slight decrease from a year ago. And this, as previously, is most related to our network expansion, development, maintenance of the store network and development of our digital services. So with that, I invite Mika back to talk about our guidance.

Thank you, Tapio, and don't go too far because it's time for questions soon. Yes, about the Tokmanni Group's guidance, First of all, we've specified the guidance for 2025. We basically expect the revenues to be in the range of EUR 1.71 billion to EUR 1.75 billion. And the EBIT, we expect to be in the range of EUR 85 million to EUR 95 million. So this is specified from the previous guidance. And then the payment of the second dividend installment, well, basically, the Tokmanni Group Board decided that Tokmanni group won't be -- or basically, yes, it's decided that it won't be exercising the authorization to pay the second dividend installment for the financial year ending 31st December 2024. And the aim is to strengthen the company's balance sheet and to ensure the funding of investments and growth. Basically, the investments and growth are the new store locations, strategic projects and IT systems as well as the current structure of, basically, company's balance sheet. So this is, basically, a decision from the Board of Directors of Tokmanni Group. And at the moment, in Tokmanni Group, we have the full focus on profitability. Actions are ongoing, especially in Tokmanni segment, they've been successful and we're working on Dollarstore segment very hard. Basically, for the whole Tokmanni Group, the strategy period which is actually 2021 to 2025, it will obviously end by the end of this year. And the new strategy period will start with full focus on profitability. Both segments -- both Tokmanni and Dollarstore segments will concentrate on increasing sales, optimizing gross profit gross margin and, of course, tight cost control. And then a new CEO for Tokmanni Group. Mr. Sampo Päällysaho will start in the beginning of July. So one of his first job is to start working on the group strategy during the -- sorry, during the second half of 2026, and it will be launched before the end of the year 2026 as well. But at the moment until July, Tokmanni Group will fully focus on improving profitability. So thank you very much. And right now, it's time for questions.

So please raise your hand with the teams and then we'll start right away. Very good. And Joonas is the first one. So Joonas, please go ahead.

It's Joonas Häyhä from OP. So firstly, regarding Dollarstore, you had less seasonal promotions in Dollarstore yet the gross margin weakened even though you should have some synergies in. So can you elaborate the situation around the gross margin in Dollarstore?

Yes. So obviously, there's many factors contributing to that. So if you compare to last year, we had a lot of sales. But obviously, those were focused on very much on the old products which were already written off to some extent. So there was a sort of a mitigating impact on the gross margin from the sale of the, let's say, the very old products because typically, you sort of write off the products as they age. So that was one thing that is different this year, obviously. The second thing is the product mix. So we have a clearly higher-value product mix and that impact with the increase of the Tokmanni private label has a very positive impact. But then the negative impact is that typically the very low products actually have a very high gross margin percent. So when you sell less of the low-value products and you lose the volume there, that has a negative impact. And it's a mix of those things and also some, let's say, logistical costs have obviously increased as we changed the business model. So most of those costs also go above the gross margin. But we don't feel very worried about this small decline. So we do see that by bringing more and more the Tokmanni private labels, the long-term effect will be clearly positive. And of course, it will drive up also the sales per store, which is the key to driving the profitability and customer confidence, yes.

All right. And then continuing on Dollarstore. So it looks that the personnel count was slightly lower in Q2 versus Q3 versus last year. yet the personnel costs grew quite much in Dollarstore? Can you elaborate this development?

Yes. So there's, again, many factors. There one of the things we have used more, let's say, these sort of externals, especially in the logistics side. So they don't actually count in our own personnel. So that's one of the key reasons that change is there.

Okay. And then regarding Finland, you had the -- you sold the seasonal inventories at a discount. I was wondering what kind of impact did that have on the average basket size in Finland? Was that supportive or dilutive in Q3?

It was supportive, yes. Because basically, especially with the summer season products, they are slightly higher ticket products especially in barbecue, in garden. So yes, it had a positive impact also on the average basket.

Are you able to quantify how much?

We are able, but we don't disclose such level of detail, but let's say it was clearly a positive impact.

Thank you, Joonas. And then it's Maria Wikstrom.

My first question is, I mean, on the current trading conditions, given that I think it was a disappointment that Dollarstore like-for-like sales growth was negative in the quarter. Because, I mean, despite you have had some profitability issues, I mean, your sales have developed very favorably. So can you comment, I mean, how has -- I mean how has the sales developed so far in Q4? So is there a change in the trend? Or is this something that we should expect, I mean, for the final quarter as well?

Well, we can't comment on the Q4, but obviously, we are doing whatever we can to drive the sales. And I don't think we need to say that we are not happy with the Q3 sales at Dollarstore. So we are doing things as I think we mentioned in the previous earnings call, we are increasing the leaflet size and the distribution. So we have now every week this weekly leaflet that we had when we acquired Dollarstore, they were doing once-a-month leaflet. So we've now gradually increased the leaflet rate to now once per week, which is essentially the same as for Tokmanni. And that, of course, has an impact on the marketing costs, but we feel that, that will drive -- help drive sales. And like I said, the change in the product mix, it does have some impact on the short term in the customer base. So we are, of course, trying to keep the old customers. But at the same time, we are definitely seeking also new customer segments. Like Mika mentioned, we have this pilot store and we will definitely use that experience to see what kind of new customer groups we get to -- get us customers in this kind of selection, which is much more close resembling the current Tokmanni selection than the current Dollarstore selection.

And then my second question would be, I mean, given that the performance, I mean since your acquisition of Dollarstore has been -- I mean, I would describe it maybe a lackluster. What gives you the confidence actually to continue rolling out new stores? I mean, before you have actually fixed the existing concept.

Yes. Well, as I told before, we are also like we are also like testing this kind of a new concept, and we have very good experiences from that. So with these coming stores, we will also increase the Tokmanni private labels and increase the assortment. So we are basically on the way towards like more joint assortment together with Tokmanni and Dollarstore. And since actually with let's say, with the increased assortment stores in Sweden and in Denmark, the sales are better. So that gives us the confidence that we are on the right track also with the Dollarstore and with the new store openings. And well, obviously, it's a valid point that like maybe we should slow down. But with this store network issues and store sites, basically, the decisions are done 12 months before. So yes, it's like it's -- that's also something that we have like obligations over there. But in this case, when we know that actually the more -- the bigger assortment stores are bringing more sales, that's, of course, a good sign.

It's not like they will go to waste the new stores. So once you change the assortment, it's not that much extra investment in especially the new stores, the layouts have been designed. So that is not so difficult then to convert them into whatever concept we then decide. So it's not like we invest 10 now and then have to invest another 10 if we do change the concept over time. So it doesn't go to waste in a way the investment.

And then my final question is on the balance sheet. And I think you, Tapio mentioned that the financial situation continues to be good, which I think, I mean, I would love you to elaborate a bit because, I mean, given that the Board decided not to pay the second installment of the dividend, I obviously would think that, I mean, there are reasons behind which links to the strength of the balance sheet. And then I would be happy to hear a bit more on the covenants that we are now approaching the covenants why you decided not to pay the second installment of the dividend.

Well, let's put it this way that we want to be ready for growth going forward. So as Mika mentioned, we'll focus this next year on profitability, but I think we are, let's say, strengthening the balance sheet a bit so that we are ready for growth then of course, the new strategy will be then published in due course, but Tokmanni is a very growth-oriented company. So I don't see that the new strategy would mean that we would decrease our growth ambitions. Quite the opposite. We have a lot of opportunities with the SPAR brand in Finland, and we have a lot of opportunities to take Dollarstore further both in Denmark and Sweden and then potentially also other markets. Like we said, we are thinking about our potential markets around the Baltic Sea. So there are still quite many countries around where we're not present in at all at the moment. So -- and given the Dollarstore acquisition was done with basically all cash or all debt, however, you put it, that, of course, changed the leverage position of the company quite significantly. So we want to be sure that when the time comes, we are ready for the growth. So this is not done to, in some way that there's some kind of crisis on the balance sheet. It's been quite stable over the last 6 months, but we want to ensure that we have then the firepower to grow in the future as well.

For the new strategy period.

So if I read you right, there is still some leeway, I mean to the covenants.

Yes. There is some leeway. Like I've said before, there is still some leeway. But of course, it's come down the leeway from -- before the Dollarstore acquisition.

Yes. Thank you, Maria. And yes, I guess we will take next Miika. Please go ahead.

This is Miika from DNB Carnegie. And I think that Maria touched really the key points there or earlier questions. So well, I'm first trying to understand that -- you are now carrying more direct import Tokmanni private labels versus this traditional Dollarstore ranges. So do you see any risk that what if the Swedish customers do not embrace this shift? And that's really my first question.

Well, basically, like I've said several times in this quarterly reports that -- or presentations that a Dollarstore is actually it's built on the entry-level products. And it has been in the -- well, in history, it's been mainly entry-level products. And this is, of course, for a very price-oriented customers. It's very good. But with this SEK 10 products or SEK 20 products, it's quite difficult to increase the sales per store. And as you probably know, Miika, that actually Tokmanni is double the sales per store compared with Dollarstore. So yes, we decided to bring some higher-ticket products from Tokmanni private label ranges. And actually at the amount of the private labels from Tokmanni, it's actually quite big already and getting bigger all the time. And actually, as Tapio was also presenting the private label sales, they're increasing, especially in Dollarstore. So we're actually quite satisfied. Personally, I was mostly, let's say, worried, for example, for this kind of private labels like Kotikulta from Tokmanni because Kotikulta is a very traditional Finnish name. But actually, it's the best selling private label range in Sweden at the moment. So it's a little bit like a shift. And for those customers who have been coming to Dollarstore for mainly -- for the lowest price level products, it's a slightly bad news. But for those customers who haven't been -- who haven't had the confidence on Dollarstore, like old products. These new products are, of course, very, very nice alternative because the quality level is clearly higher. And there are no quality issues as in the previous assortment of Dollarstore. So yes, there is a transition period where the, let's say, the old customers are getting a little bit worried, like, okay, how are the price levels in Dollarstore at the moment. But at the same time, we are able to invite like new customers to buy also like bigger basket sizes to Dollarstore. Hopefully, this was a little bit like an explanation for you. But yes, we are in the middle of a transition period in Dollarstore.

Yes. I understand completely the rationale there. But just it is slightly concerning as now you might be changing the concept and that might imply also different competition that you were previously experiencing. But to my next question. So you mentioned that in Tokmanni, Finland, sales were driven especially by strong sales in July, implying that August and September slowed down from the July level. So I'm wondering if either August or September saw any negative sales trend actually there? And if you can comment how Q4 has started in Finland.

Yes. Well, actually, first of all, I'll come back to your previous question when you said that the competition is harder. Actually, we believe that with Tokmanni Group volumes, we are pretty strong with, let's say, the private label ranges in the Nordics actually because based on our information, we are definitely, well, quite a big buyer of these products. And obviously, we're testing and comparing them all the time, and we're following the price levels all the time. And I think that we're very, very competitive. And of course, we see that also in Finland with, let's say, for example, Swedish retailers like how we are competing with them. Regarding the sales part in July, that was, of course, very, very successful except the gross margin part. I'd say that -- let's say, the atmosphere in the Finnish market has been quite negative as you probably know as well as I do. And obviously, it shows in the market as well. But yes, we do actually get some more positive signs, very small ones, but still a little bit -- the direction is kind of changing to a slightly more positive direction. But yes, as you know, the discussions in Finland, let's say, it's a very, very strong pressure on the consumers and customers in Finland to spend some more money. And that, of course, has been shown in the Finnish market for, let's say, for this whole year. But still, I would say that we are seeing some positive signs, small ones, but still positive. Thank you. And then the next one is Calle. Please go ahead.

It's Calle Loikkanen from Danske Bank. Just a few questions still on Dollarstore. I was wondering, you mentioned a few times that there is -- the Dollarstore has the transition period ongoing, but how long do you think the transition period actually will continue?

Well, it's difficult to say. It's difficult to say at the moment our, let's say, best experiences in Sweden are coming from the pilot store, where we are selling approximately actually more than 30,000 SKUs. So if we start thinking about converting, let's say, all Dollarstore -- all the stores with this let's say, 20,000 to 30,000 SKUs, obviously, it will be taking some time, but it's worth it because of the sales and result experiences that we have from the first one. But it's -- maybe it's a little bit too early to start estimating the time over there or Tapio would you like to be the brave one to say something regarding the timing?

Yes. I don't think there is one point in time where you can say you're done in a way, I mean, retail is continuous improvement. So -- but I think the big actions, I think we will focus on completing during next year in terms of the integration. And then, of course, the concept development is a whole other thing, whether we do it in steps or if we take bigger things at once that we haven't decided yet. And now the new strategy will also have a big impact on that, how quickly we want to do things and how radical the changes then will be in then. But I would say that at the moment, Dollarstore is still in transition phase. And of course, the customer base also changes slowly. So we know that from Tokmanni that it takes some years to attract completely new customer segments and so on. So you need to show the range, you need to show the quality and the word of mouth and moves along. And of course, all the marketing activities we do, we need to completely trying different kind of marketing things at Dollarstore at the moment and see how they stick. So it's also a little bit of trying different things at the moment.

That makes sense. Then I was wondering about the difference between Sweden and Denmark. Has there been any difference in performance, any difference in how this joint assortment has been kind of received by the customers and so on. So any differences between these 2 countries?

Yes. Obviously, Denmark and Sweden, they are like different markets as well as Finland. But if I've understood correct, our Danish colleagues are saying like, please send the 20,000 Tokmanni SKUs as soon as possible to Denmark. So obviously, the -- from the Danish perspective, the Tokmanni private label ranges have been very successful. It is obviously a slightly different market, but yes, we're very, very happy with the Danish operations. And obviously, especially the non-groceries, we will start pushing that more in Denmark because it looks as if it's very successful over there in Denmark. But of course, at the moment, it's only 10 stores. But still, yes, we get a good picture. The market is different, but the private label ranges work very well.

And then I was wondering -- I mean, maybe this is a bit of a philosophical question as well, but I'm a bit wondering why you actually acquired Dollarstore because you bought it a couple of years ago. Back then, you stated that the track record of the company is strong. They had been like doubling sales, was it every 4 years or something like that. So a lot of growth, a lot of new store openings and all of that. And now you've been spent like 2 years changing the concept, which basically then has slowed down growth rates quite a lot. So I was just wondering that I mean why did you acquire Dollarstore, just to change the concept rather than go greenfield with your choice of concept from the very start.

First of all, Calle, it's very, very like you're in a very -- having a very good question over there. Obviously, in the beginning after -- right after the acquisition, we didn't start like unifying the concept. We had a very slow start with combining the assortment. Obviously, that's due to the fact that it takes basically 12 months, especially with non-groceries to do the joint buying and to get the goods, the joint bought goods to the stores. As soon as we started to get, let's say, a year ago, the first Tokmanni private labels in Dollarstores, we saw a very good sales development with these products. So we started to push that. And at the moment, we can see that the more combined we do the assortment and even the concept, obviously, we have been doing some changes also in Finland based on the learnings from Dollarstore, so in Tokmanni stores, some of -- some learnings from Dollarstore, but anyway, the more we combine the better results we get. So actually, if you think about it, at the moment, if Tapio would know the exact figures, but Tokmanni average sales per store is something like EUR 6.5 million, roughly like that. And Dollarstore stores is [ EUR 3.3 million ] , half of it, basically. So obviously, we do have exactly the same product groups. So we see a huge potential at the moment with Dollarstore and Big Dollar, right? Taking the -- driving the assortment towards the same assortment in the core concept. Obviously, there are like country-specific products like in Finland, for example, we do sell more groceries. And in Sweden, it's a lot of Swedish products as well. And in Denmark, also Danish products. But the core concept, we, at the moment, we see a huge potential with the stores in Sweden and in Denmark to double the sales per store with the help of, basically, larger assortment, which includes Tokmanni private labels as well as A brands. So that's the story. Unfortunately, the changing the assortment is taking -- well, it has been taking too much time. We should have started earlier, but we're here now.

That's helpful. But doubling sales per store, that's probably going to take many years, I guess?

Yes. But I think it will be much faster than if we started with the greenfield. So of course, we looked at both options, and this is then what was decided to go. And I think it is. If we look at it from 5 years from now, I'm pretty sure that it was the right decision. Of course, things haven't been progressing quite the way we would have liked, but it's very often in these acquisitions that they don't move quite as smoothly as one would hope.

And then finally, on my part, the guidance and the comparable EBIT range. You have now year-to-date, EUR 36.5 million of comparable EBIT, which means that you need EUR 48.5 million in Q4 to reach the lower end of the guidance. And last year in Q4, you did EUR 47.5 million. So in practice, you need to grow EBIT by 2% now in Q4 year-over-year. What makes you kind of comfortable that you can improve the EBIT at least at 2%, given that year-to-date EBIT is around 30%?

Well, as I already mentioned, there are some positive signs in the market as well. So that gives us the confidence to target also with a slightly better EBIT for the fourth quarter.

Can you be a bit more kind of concrete or give you examples on what the signs are that you are seeing?

No. Of course, some of it has to do with the market that some of the things that we have been doing both at Tokmanni and Dollarstore in the past 6 months that we are quite confident that we start to see the results also in the figures in the fourth quarter.

Thank you, Calle. And then the next one is [ Svante ], please go ahead.

Actually, I also had a question regarding the guidance, but you answered it already. Perhaps one question regarding Dollarstore and the decline in like-for-like customers, but increasing average basket size. So how would you balance this going forward? I mean I understand that if you want to get new sort of clients into the stores increasing the basket size. How long will you kind of accept? I know that there was clearance sales in Q3 last year in Dollarstore, but how long will you accept that the customer visits will decline?

No, we won't be accepting that at all. Actually, when you change the assortment or when you do some changes, obviously, you need to communicate that to customers, and that's exactly what we're doing at the moment. I think a year ago, we had basically like 1 leaflet per month or maybe 2 leaflet per month. Now we're actually sending our customers like marketing leaflets once a week, talking about our new assortment, talking about the -- or communicating about the new private labels, which are tested and proven to be good quality. And of course, the price level as well. Obviously, Dollarstore has one of the best price images in Sweden. So we -- of course, we try to keep that as hard as possible, but it's all about communication, basically marketing. So we have -- we are now investing quite a lot in marketing because we won't be accepting minus figures in customer flows.

And you mentioned that Kotikulta brand is selling well in Sweden. Now have you have some product categories from the Finnish Tokmanni segment that haven't performed so well in Sweden that you can tell us?

Some products obviously take a little bit more time, especially if you think about like more technical products, which are strongly quality driven. For example, electrical hand tools. In Finland, we have a very successful private label range for electrical hand tools. The range is called Brykke. It's very, very well tested. And it's also like proven in external tests to be very good quality and one of the price leaders in Finland. But obviously, if you have like a history of entry-level products as Dollarstore does, it takes quite a lot of communication to get this kind of confidence on products like electrical hand tools. So that's -- but we're definitely pushing that because we've already seen some sales that are satisfying, but we know that we need to do a lot of work to convince our customers that it's extremely good products. But that, I would say, the Brykke technical products are the ones which are a little bit like a slow moving compared with others. Thank you, [ Svante ] . And actually, I don't think that there are any more questions. So thank you very much, and you all are warmly welcome to do the Christmas shopping in Tokmanni stores in Finland and Click Shoes, of course, as well in Finland and Dollarstore in Sweden and Big Dollar in Denmark. Thank you.