Westwing posts 13 percent Q3 revenue growth as international sales accelerate

Hamburg - NuWays AG has published an equity research update on Westwing Group SE (ISIN: DE000A2N4H07), in which analyst Christian Sandherr reiterates a "BUY" recommendation with an unchanged 12-month target price of 23.50 euros.

Westwing delivered its fifth consecutive quarter of growth despite a soft consumer backdrop and higher freight costs. The figures show a company steadily turning into an international premium home and living brand while doing so profitably.

Q3 topline driven by international

Revenues rose 13 percent to 111 million euros, assisted by the shipment of backlog from the second-quarter system migration.

After a flat July when heatwaves kept consumers away, momentum built through August and September. International remained the primary growth driver with a 22 percent increase year on year, while the DACH region returned to growth after a weak July, rising 5 percent.

The expansion in the DACH market was supported by both online and offline growth. Active customers increased 13 percent to 1.32 million, while order volume rose 9 percent. Average order value eased 2 percent to 247 euros, as price-sensitive shoppers concentrated purchases around promotional events and tended to buy lower-ticket items.

Margin held despite the freight shock

Adjusted EBITDA grew 7 percent to 6.5 million euros, representing a 5.8 percent margin.

Fuel-driven container and outbound logistics costs, migration effects, product mix shifts with a lower Westwing Collection sales share, and the UK logistics ramp-up reduced the contribution margin by 4.3 percentage points.

However, approximately 4 percentage points of operating leverage on marketing and administrative expenses offset almost all of the pressure. Price adjustments, increased shipping fees, and logistics efficiencies implemented during the quarter visibly improved margins by October.

Footprint and brand advanced in parallel

Five market launches during the third quarter across the Baltics, Ireland, and Bulgaria have expanded Westwing's presence to 28 countries, covering almost all of Europe. The United Kingdom, entered in March, represents the largest single market addition.

In October, Victoria Beckham debuted her first homeware collection with Westwing, accompanied by a brand campaign in Germany and the UK. The Westwing Collection accounted for 64 percent of gross merchandise value, down 2 percentage points year on year, as partner design brands expanded faster at 13 percent compared to 4 percent.

Guidance confirmed, revenue in the upper half

Full-year 2026 targets of 470 to 495 million euros in revenue and 36 to 48 million euros in adjusted EBITDA remain confirmed.

Following nine-month revenue of 345 million euros, reaching the upper half of the guidance implies fourth-quarter sales between 138 and 150 million euros. The research firm's adjusted EBITDA estimate of 42 million euros requires approximately 20.5 million euros in the fourth quarter, compared to 22.6 million euros in the prior-year period, leaving headroom for brand campaign investments.

Self-funded expansion

Third-quarter free cash flow of negative 0.7 million euros, compared to 10.4 million euros in the third quarter of 2025, primarily reflects inventory timing.

Net cash stood at 63 million euros, up 5 million euros year on year, with net working capital remaining negative. Cash reserves are projected to reach approximately 90 million euros by year-end following the seasonally strong fourth quarter.

This liquidity funds both business growth and the share buyback program of up to 10 million euros launched on October 12. Upcoming strategic initiatives include warehouse consolidation in Poland, AI-driven productivity enhancements, and the development of B2B and partner channels to support margins beyond 2026.

Quality at a discount

Westwing combines pan-European reach, an established premium brand identity, double-digit growth, and a well-funded balance sheet, yet trades at 4.8 times estimated 2026 enterprise value to adjusted EBITDA.

Newer geographic markets and the UK provide additional growth potential, while management execution on its value-creation strategy supports the positive outlook. NuWays AG maintains its "BUY" recommendation with a discounted cash flow-derived target price of 23.50 euros.