Nelly Group (OM:NELLY) Stock Faces Slower Earnings Growth That Tests Bullish Narratives

Nelly Group (OM:NELLY) has just posted Q2 2026 revenue of SEK346.3 million and net income of SEK30.4 million, with trailing twelve month net income at SEK135.1 million and EPS at SEK4.50. Over recent periods the company has seen quarterly revenue move between SEK247.8 million and SEK370.5 million, while quarterly EPS has ranged from SEK0.17 to SEK1.94, giving investors a fuller view of how the latest figures sit within its recent history. With a 10.9% net margin over the last 12 months and earnings growth running below its longer term pace, this set of results leans more toward steady profitability than headline grabbing expansion.

See our full analysis for Nelly Group.

With the numbers on the table, the next step is to see how Nelly Group's earnings story lines up with the most widely held narratives around its growth potential, risks, and profitability profile.

Curious how numbers become stories that shape markets? Explore Community Narratives

10.9% net margin holding steady for Nelly Group

• Over the last 12 months, Nelly Group kept its net profit margin at 10.9%, the same level as the prior year, while trailing 12 month earnings rose 6% and basic EPS over that period reached 4.50 SEK.
• What stands out for a bullish narrative is the contrast between this steady 10.9% margin and the very strong 66.6% per year earnings growth over five years, which hints at a business that has already gone through a sizeable profit build up, even though the most recent 6% earnings growth over the last year is much lower than that longer term pace.
  • Bulls can point to the 1,243.7 million SEK of trailing 12 month revenue alongside 135.1 million SEK of net income as evidence that Nelly Group has scaled to a level where double digit margins are being maintained.
  • At the same time, the slower 6% earnings growth rate means anyone leaning on the bullish history needs to factor in that recent performance sits well below the earlier 66.6% per year compound rate.

P/E of 7.7x versus 15.7x industry

• Nelly Group is trading on a P/E of 7.7x compared with 15.7x for the European Specialty Retail industry and 20.3x for the Swedish market, and the DCF fair value is 34.33 SEK against a current share price of 34.54 SEK.
• Bears argue that a low P/E can be a value trap when earnings quality is questioned, and the risk section highlights both a high level of non cash earnings in the trailing numbers and comparatively high share price volatility over the last three months. Together these factors suggest investors are already demanding a discount despite the seemingly tight gap between the share price and the DCF fair value.
  • The fact that the stock trades slightly above the 34.33 SEK DCF fair value at 34.54 SEK means the market is not pricing in a large margin of safety relative to that model, even though the headline P/E looks low versus peers.
  • Reports of a high non cash component in earnings and higher recent volatility versus the broader Swedish market give skeptics concrete reasons to question how dependable the current 4.50 SEK of trailing 12 month EPS really is.

For a closer look at why some investors see valuation upside while others flag quality and volatility concerns, skeptics often turn to a detailed bear case to stress test the numbers before making any decisions about Nelly Group. 🐻 Nelly Group Bear Case

Quarterly swings around 346.3 million SEK revenue

• Looking at the last six quarters, Nelly Group's revenue has moved between 243.3 million SEK and 370.5 million SEK per quarter, with Q2 2026 landing at 346.3 million SEK and net income of 30.4 million SEK, compared with a recent low point of 5.1 million SEK of net income on 243.3 million SEK of revenue in Q1 2026.
• Supporters who focus on the business story argue that running an online fashion and lifestyle operation naturally comes with swings between quarters, and they often point to the company’s Nordic focused brand and multi channel presence as reasons why the longer term earnings record, including 66.6% per year profit growth over five years and 135.1 million SEK of trailing 12 month net income, may matter more than any single quarter’s movement within the 243.3 million SEK to 370.5 million SEK revenue range.
  • The trailing 12 month revenue of 1,243.7 million SEK and EPS of 4.50 SEK show that, despite quarterly ups and downs, Nelly Group has built a business that generates more than 1b SEK of annual sales at current scale.
  • The pattern of quarterly net income running between 5.1 million SEK and 58.2 million SEK over the recent six quarters underlines how important it is for investors to focus on the trailing 12 month figures when weighing the story rather than reacting only to one period.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Nelly Group's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

Seeing both risk flags and rewards around Nelly Group, it makes sense to check the underlying data yourself and decide quickly where you stand, starting with the 2 key rewards and 3 important warning signs.

See What Else Is Out There

Nelly Group shows steady profitability but faces questions around slower recent earnings growth, high non cash earnings and share price volatility that may limit comfort for some investors.

If those swings and quality concerns make you cautious, it could be worth shifting focus toward companies with more resilient profiles by running the 286 resilient stocks with low risk scores.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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