Normal continues spectacular growth in 2024
The Danish discount retail phenomenon Normal reported another stellar year of growth. The company saw revenues grow by almost 40 % while profitability remained robust. Regarding profitability, the gross margin increased while the operating profit margin decreased slightly. This might be due to the rapid growth of opening more than 220 stores.
During the year, Normal increased its store network by 40 %. This fast growth often means that the costs can spiral out of control. Normal has been admirable in managing costs. The operational costs grew at the same pace as did the revenue. Staff costs grew faster and were responsible for the marginally lower operating margin.
Considering how fast Normal grows and will grow in the future, it is only sensible to overinvest in staff slightly. Thus, the company can have more flexibility in opening new stores as the staff are already on the payroll.
Rapid expansion with slightly less impact
The rapid expansion has taken Normal to eight markets, from Finland to Spain. Expansion has also reduced the portion of sales coming from the home market in Denmark. A year ago, Denmark constituted 28 % of the company’s sales. During the last fiscal year, only 24 % of revenue came from Denmark, despite Danish revenue growing by +21,5 %.
An interesting detail in the company’s annual report was that store productivity slightly decreased during the last year. Previously, during the expansion, the company increased revenue faster than the store count. This meant that the existing stores continued to grow in sales in previous years.
Normal CEO Jesper Due promises further rapid growth for the company.
“We expect to further expand our business with an increase in topline and profit in the range of 10-20%.”