Comprehensive Review of Axfood AB (publ) Q4 2025 Earnings Call and Annual Results

In this detailed analysis, we unpack the most important outcomes of the fourth quarter 2025 financial results and earnings call for Axfood AB (publ) (AXFOY), the Swedish grocery retailer. Axfood’s performance was reported on January 29, 2026, including both quarterly metrics and a summary of strategic developments that shape expectations for 2026 and beyond. The company delivered solid results overall, aligning with consensus expectations on revenue and operating profit, while also proposing an increase in dividend—key highlights that investors and market participants should understand.

Overview of Financial Results

Axfood reported its fourth quarter 2025 net sales growth of 4.4% year-over-year, reaching SEK 22,831 million compared to SEK 21,860 million in the previous year's fourth quarter. While this increase was somewhat below the analyst consensus forecasts (which projected net sales of SEK 23,138 million), the result still demonstrated resilience in a competitive grocery market, supported by continued sales momentum across the company’s major retail brands.

The company’s operating profit for the quarter came in at SEK 860 million, marking a significant increase from SEK 629 million recorded in Q4 2024. Analysts had expected operating profit around SEK 858 million, indicating that Axfood slightly surpassed expectations in profitability metrics. The operating margin for Q4 2025 was reported at 3.8%, up from 2.9% in the prior year, reflecting improved leverage and cost management.

Adjusted operating profit—a metric that removes specific items affecting comparability—came in at SEK 873 million (compared with SEK 772 million in the year-ago period), underlining the company’s strengthening underlying profitability trends. The adjusted operating margin was 3.8%, slightly higher than the prior year’s 3.5%.

Profit Before and After Tax

Profit before tax also rose notably, reaching SEK 734 million in Q4 2025 versus SEK 506 million in Q4 2024. The profit after tax amounted to SEK 574 million, an improvement that reflects both increased earnings and better operational performance. These strong bottom-line results help support confidence in Axfood’s current strategies and investment focus as it enters 2026.

Earnings Per Share

Axfood’s earnings per share (EPS) for Q4 2025 was reported at 2.60 kronor, up considerably compared to 1.62 kronor during the fourth quarter of 2024. This improvement in EPS further reflects the company’s enhanced profitability and the successful delivery of its financial objectives in a challenging macroeconomic environment.

Dividend Proposal and Shareholder Returns

In addition to delivering on earnings expectations, Axfood’s board proposed an increase in the regular dividend for shareholders. The proposed dividend for the year was set at 9.00 kronor per share, compared to 8.75 kronor in the prior year. This decision underscores the company’s commitment to returning value to shareholders while maintaining capital discipline.

Cash Flow and Investments

The fourth quarter 2025 also saw a notable improvement in cash flow from operating activities. Axfood reported operating cash flow of SEK 2,238 million, up from SEK 1,872 million in Q4 2024. This stronger cash flow generation provides enhanced financial flexibility and supports continued investments in both logistics and store expansion.

Looking ahead, Axfood expects investments in 2026 to total between SEK 2,200 million and SEK 2,300 million (excluding acquisitions and right-of-use assets). A portion of this—including an estimated SEK 470 million—is earmarked for automation at its new logistics center in Kungsbacka, demonstrating a clear focus on supply chain efficiency and future readiness.

Strategic Growth and Expansion Plans

Axfood’s long-term strategy includes continued expansion of its store footprint and enhancing customer value through competitive pricing, service improvements, and digital innovation. As part of these plans, the company expects to open between 10 and 15 new wholly owned stores in 2026, with locations selected to maximize market penetration and meet evolving consumer preferences.

This expansion ties into Axfood’s broader strategic objective of strengthening its retail network and consolidated market share in Sweden’s grocery sector. The company’s multiple store formats—including discount chain Willys, full-service Hemköp stores, and logistical support from Dagab—are aligned to deliver differentiated value propositions to diverse customer segments.

Market Conditions and Competitive Landscape

The Swedish grocery market remains highly competitive, with pressure from both traditional retail rivals and growing e-commerce penetration. Despite these challenges, Axfood has continued to grow its overall sales and sustain profitability through disciplined cost control, selective price adjustments, and ongoing improvements in store productivity. This balanced approach has contributed to improved year-on-year results in both revenue and operating profit.

Analysts following Axfood have noted that strong performance in recent periods has stemmed from a combination of structural resilience and operational agility. While overall growth rates may vary due to macro factors and consumer spending fluctuations, the company’s underlying fundamentals—including diversified retail formats and logistics capabilities—remain supportive of long-term value creation.

Market Reaction to the Earnings Results

Following the release of the Q4 2025 results and earnings call update, Axfood’s stock price showed relative stability. Shares traded in line with expectations as investors digested both the solid financial performance and the implications of the increased dividend and investment plans. While short-term price movements can fluctuate based on broader market sentiment, the company’s performance metrics provided confidence to many long-term shareholders and analysts.

CEO Commentary and Future Outlook

While the official earnings call transcript includes detailed remarks from Axfood executives, the high-level financial highlights suggest a positive outlook. Management emphasized the importance of leveraging operational improvements, driving profitability, and maintaining a customer-centric approach in all areas of the business. The company also continues to focus on e-commerce growth and logistics modernization as key pillars of future performance.

Axfood’s commitment to thoughtful investment—balanced with shareholder returns—positions it well for navigating both opportunities and risks ahead. With investments in automation, expansion of store networks, and continued refinement of operating efficiencies, the company appears focused on sustainable, long-term growth.

Summary of Key Financial Metrics – Q4 2025

• Net Sales: SEK 22,831 million (up 4.4% year-over-year)
• Operating Profit: SEK 860 million (vs. SEK 629 million in Q4 2024)
• Adjusted Operating Profit: SEK 873 million (up from SEK 772 million)
• Profit Before Tax: SEK 734 million (vs. SEK 506 million)
• Net Profit After Tax: SEK 574 million
• Earnings Per Share: 2.60 kronor
• Proposed Dividend: 9.00 kronor per share
• Cash Flow From Operations: SEK 2,238 million

Conclusion

Axfood AB’s Q4 2025 earnings and annual performance present a clear picture of stability and moderate growth in an evolving retail environment. With revenue and profitability largely in line with expectations, an increased dividend, and ongoing strategic investments, the company is navigating market challenges while positioning itself for future opportunities. Investors and industry watchers will continue to monitor Axfood’s performance closely as the company executes on its vision for expansion, supply chain excellence, and customer engagement in 2026 and beyond.

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