Douglas - comment

Q2 is always a dampener for Douglas, due to relatively slow business following the annual winter binge and thus seasonally outflowing WC. The company, however, exceeded even our expectations with both higher sales and better gross margin than we had modelled - only a minor part of the margin improvement allegedly being due to timing between product purchase on last year’s prices and sales in the current inflationary environment. This echoes our analysis, which shows the effect already half reduced in Q2 and mostly evaporating going forward. CEO van der Laan presented the outlines of the company’s Let it Bloom strategy, which will see the company focus away from major strategic shifts towards an internal focus on efficiency and omnichannel integration - with the exception that Douglas want to equilibrate their beauty categories and move into hair care.