Stock Markets July 15, 2026 01:46 AM

Axfood's Q2 Revenue Falls Short as Food Price Deflation and Calendar Effects Weigh

Retailer posts modest sales increase but misses analyst forecasts on revenue and operating profit; Hemköp expands share while City Gross profitability target remains for H2 2026

By Leila Farooq
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Swedish grocer Axfood reported second-quarter sales that marginally rose year-on-year but did not meet analyst expectations, as food price deflation and calendar effects held back growth. Operating profit and consensus-beating metrics missed forecasts, while the Hemköp chain delivered notable expansion. Management reaffirmed its City Gross profitability target for the second half of 2026 and said it will press on with logistics and cost-efficiency measures amid higher fuel costs.

Axfood's Q2 Revenue Falls Short as Food Price Deflation and Calendar Effects Weigh
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Key Points

  • Axfood reported Q2 revenue of SEK 23.2 billion, up 0.9% year-on-year but below the SEK 23.67 billion analyst consensus.
  • Operating profit was SEK 964 million, missing the SEK 1.008 billion forecast; the company posted an EBIT margin of 4.20% and net income of SEK 647 million with adjusted EPS of SEK 2.94.
  • Hemköp grew by 7.4% and gained market share; Axfood reaffirmed a goal for City Gross to achieve profitability in the second half of 2026 and will pursue logistics and cost-efficiency measures amid food price deflation and higher fuel prices.

Overview

Axfood reported second-quarter revenue of SEK 23.2 billion, a 0.9% increase from the same period last year but short of the SEK 23.67 billion consensus estimate provided by four analysts. The company attributed the subdued top-line performance to food price deflation and calendar effects that reduced comparable growth during the quarter.

Profitability and margins

Operating profit for the quarter amounted to SEK 964 million, below the SEK 1.008 billion analysts had expected. Axfood recorded an EBIT margin of 4.20% for the period. Net income was SEK 647 million, and adjusted earnings per share were SEK 2.94.

Chain performance

Within the group, the Hemköp chain achieved 7.4% growth and expanded its market share, a development Axfood highlighted as evidence of strengthened positioning in certain customer segments. The company reiterated that it is pursuing long-term strategic initiatives and targeted measures aimed at bolstering growth.

Outlook and operational focus

Axfood confirmed its objective for City Gross to reach profitability in the second half of 2026. To navigate the combined pressures of food price deflation and elevated fuel costs, management said it will continue to focus on optimizing logistics and improving cost-efficiency across operations.


Contextual note

The reported figures reflect management commentary that deflationary food prices and calendar effects reduced momentum in the quarter, while selective chain-level gains and ongoing cost and logistics programs remain central to the company's plan to restore stronger growth and margin performance.

Risks

  • Continued food price deflation could further suppress revenue growth and pricing leverage for grocery retailers - impacting the consumer staples and retail sectors.
  • Elevated fuel costs may increase logistics and distribution expenses, pressuring margins across the grocery supply chain and related transportation services.
  • Failure to reach targeted profitability at City Gross by the second half of 2026 would present execution risk for Axfood's long-term strategy and affect investor confidence in the retail sector.

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