NoHo Partners: Slight EBIT miss likely driven by rainy weather in Q3 – profitability remained above targeted level - Nordea

NoHo Partners reported Q3 EBIT of EUR 8.7m, -5% versus Vara consensus and +1% versus our estimate. Q3 net sales were up 12% at EUR 96m, 3% below consensus and 2% below our estimates. Operational EBITDA (operating cash flow) was EUR 10.6m in Q3 (EUR 10.7m a year ago). When adjusting for EUR 1.5m impact from Better Burger Society transaction costs, operational EBITDA came 3% below our estimate. Finland profitability came slightly below our expectations, while International beat our expectation. Deviation to our estimates in Finland is likely due to rainy weather late in the summer that affected high season of terrace sales. The company recorder EUR 3.6m negative fair value change due to Eezy shareholding to its financing costs (we anticipated EUR -2.4m). Adjusted EPS was EUR 0.18 while consensus was expecting EUR 0.15. Leverage (net debt/operational EBITDA ex-IFRS 16) was 3.3x and was increased due to the acquisition of Holy Cow!. October sales were up 19% y/y to EUR 31.7m while we have anticipated 27% y/y growth in Q4, mainly driven by acquisitions. Holy Cow! integration is progressing well with KPIs developing above NoHo’s expectations. In CEO comments, the company notes that underlying restaurant demand has remained stable. The guidance was kept intact for 2023; NoHo expects around EUR 380m sales and around 9% EBIT margin from restaurant business. Pre-Q3 Vara consensus has expected EUR 379m sales and an 9.8% EBIT margin in 2023. We expect consensus to trim slightly top line and EBIT estimates for 2023E, while we expect 2024-25 estimates to remain largely intact.