Swedencare, the Stockholm-based pet health company popular with UK retail and institutional investors, published its second-quarter results for 2026 on Thursday, revealing a stark contrast between improving profitability and faltering sales in its largest market.
Gross margin rose during the period, driven by operational efficiencies and a shift toward higher-margin products. However, the headline improvement was overshadowed by a notable decline in North American revenue, which accounts for a substantial portion of the group's turnover. The company attributed the weakness to softer consumer demand and ongoing inventory destocking among major retail partners.
The mixed performance sent shares lower in early trading on the Stockholm Stock Exchange, with the stock down around 3% by mid-session. Analysts at several Nordic brokerages noted that while the margin story is encouraging, the North American slowdown raises questions about the timing of a recovery in the region. 'The margin strength is welcome, but top-line pressure in the US is a real concern for the near-term outlook,' one analyst commented.
For UK investors, Swedencare remains a notable holding in several thematic investment trusts and pension funds focused on pet care and wellness. The company's exposure to the US market means that any sustained weakness could weigh on total returns for UK shareholders, particularly those with exposure via FTSE-listed funds that track Nordic equities.
The broader pet care sector has faced headwinds this year as post-pandemic spending normalises and consumers tighten budgets. Swedencare's ability to defend margins while navigating a softer demand environment will be closely watched by analysts ahead of its full-year trading update.