New Wave Group (OM:NEWA B) Stock Price Slides As Margin Questions Persist

The market has marked New Wave Group down over the past three months, with the stock falling about 9.9% to close near SEK89.55 on Friday. Yet the latest earnings print tells a calmer story. Q2 revenue landed at SEK2,611m with net income of SEK202m, and management framed operating profitability as “very, very good” despite an ongoing investment phase.

The real tension for investors sits in margins. Trailing net profit margin is reported at 7.7%, lower than a year earlier, at the same time as New Wave Group carries a relatively low P/E multiple and keeps spending heavily on new facilities and systems.

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Q2 2026 Earnings Summary

• Revenue (Q2 2026 vs Q2 2025): SEK 2,611m vs SEK 2,300m (up about 13.5%)
• Net Income (Q2 2026 vs Q2 2025): SEK 202m vs SEK 167m (up about 21%)
• Basic EPS (Q2 2026 vs Q2 2025): SEK 1.52 vs SEK 1.26 (up about 21%)
• Operating Margin (Q2 2026): About 11.3% on operating profit of SEK 295m, with management describing underlying operating profitability as very strong despite ongoing investments

Tired of scrolling through dense earnings tables and raw numbers for New Wave Group? Get a clear visual read on the company’s profitability and valuation mix in the easy to scan company report for New Wave Group.

New Wave Group bull case meets mixed execution

Bulls argue New Wave Group is building a higher margin, more scalable platform through own brands, acquisitions and automation. Q2 revenue of SEK 2,611m and operating profit of SEK 295m show the company can keep profitability “very, very good” while spending on Dallas and the new Toppoint facility. Gifts & Home Furnishing has moved back to a positive margin, which supports the idea that weaker units can be rehabbed. Cotton Classics is clearly doing its job for the top line, contributing most of the 14.6% sales uplift. However, organic growth of 2.2% fell well short of management’s own 4 to 5% ambition. That gap matters because the multi year plan for operating leverage assumes healthier underlying volume, not just acquired growth and cost projects.

Bear case on growth quality and margins partly holds

The bear case focuses on weak organic demand, margin dilution from Cotton Classics and heavy investment that could drag on cash flow. Q2 organic growth of 2.2% confirms that end market demand is still soft versus management’s expectations. Bears also warned that Cotton Classics would dilute group margins for several years, and the reliance on its contribution for Rest of Europe growth fits that concern even though group operating margin held at about 11.3%. The share price falling about 9.9% over three months suggests investors are questioning the quality of growth. Large projects in Dallas and Toppoint are pushing costs into the income statement through cloud and automation spending, with breakeven only expected months after start up. That timing risk is exactly what critics flagged.

After heavy spending, soft organic demand and dividends that are not well covered by free cash flow, calmly review our independent risk analysis for New Wave Group which shows 2 important warning signs.

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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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