Westwing Group’s Earnings Call: Profitability and Growth Shine

Westwing Group ((DE:WEW)) has held its Q3 earnings call. Read on for the main highlights of the call.

Westwing Group’s recent earnings call painted a picture of optimism and strategic success, despite facing some challenges. The company showcased strong profitability improvements, successful geographic and store expansions, and robust performance in its Westwing Collection and international segment. While there were hurdles such as declining revenue in the DACH segment and negative impacts from product assortment changes, the overall sentiment was positive, with achievements outweighing the setbacks.

Significant Improvement in Profitability

Westwing Group reported a notable increase in profitability, with adjusted EBITDA rising by 73% year-over-year to reach EUR 6 million. This improvement was accompanied by an adjusted EBITDA margin of 6.1%, marking a 2.5 percentage point increase from the previous year. This significant growth underscores the company’s effective cost management and operational efficiency.

Positive Free Cash Flow

The company achieved a positive free cash flow of EUR 10 million in Q3, ending the quarter with a strong net cash position of EUR 58 million. This positive cash flow is a testament to Westwing’s ability to generate cash from its operations, providing a solid financial foundation for future investments and expansions.

Strong Growth of Westwing Collection

The Westwing Collection experienced a remarkable 19% growth year-over-year, reaching an all-time high group GMV share of 66%. This growth highlights the collection’s increasing popularity and its significant contribution to the company’s overall revenue.

Successful Geographic and Store Expansion

In 2025, Westwing successfully launched operations in 10 new countries and opened 7 new stores, achieving its full-year expansion objectives. This strategic move not only broadens the company’s market reach but also strengthens its global presence.

Strong Performance in International Segment

The international segment saw a revenue increase of 10.8%, driven by the company’s geographic expansion efforts. This growth reflects Westwing’s successful penetration into new markets and its ability to cater to a diverse customer base.

Decline in DACH Segment Revenue

Despite overall positive results, the DACH segment experienced a revenue decline of 2.4% year-over-year. This decline indicates challenges in maintaining market share in this region, which the company may need to address in future strategies.

Challenges with Product Assortment Changes

Changes in product assortment negatively impacted revenue, leading to a decline in orders and active customers. This challenge highlights the importance of aligning product offerings with customer preferences to sustain growth.

Negative EBIT and Stock Option Impact

The company reported a negative EBIT of minus EUR 4 million, primarily due to the negative impact of a higher fair value of employee stock option programs. This financial adjustment underscores the complexities of managing employee compensation plans in a volatile market.

Forward-Looking Guidance

Westwing Group remains optimistic about its future, confirming its financial guidance for 2025 and expecting adjusted EBITDA at the upper end of the range. The company anticipates achieving high-single to double-digit growth and improved profitability by 2026, driven by strategic initiatives and market expansion.

In conclusion, Westwing Group’s earnings call reflects a company on a path of strategic growth and profitability, despite facing some challenges. The positive sentiment is driven by substantial improvements in profitability, successful expansions, and strong performance in key segments. As Westwing continues to execute its strategic plans, investors and stakeholders can look forward to sustained growth and financial success.