While everyone's focused on Axfood's consistent revenue growth and steady dividend payouts, a subtle but significant shift is occurring within the Swedish grocery giant. A deep dive into their recent financial data reveals a trend that seems to have slipped under the radar of most analysts: a potential move away from their traditional brick-and-mortar, grocery-centric model.

Axfood, the powerhouse behind well-known Swedish grocery chains like Willys and Hemköp, has long been a staple in the Swedish consumer landscape. Their focus on providing affordable groceries, particularly through their Willys discount banner, has resonated with consumers and fueled their steady market performance. However, the data suggests a new chapter might be unfolding in Axfood's story.

The telltale sign? A consistent and substantial negative net working capital, reaching a staggering -6.125 billion SEK in the most recent quarter. This figure, often overlooked, signifies that Axfood's current liabilities exceed their current assets. Now, while a negative net working capital isn't inherently bad, it often points to a company's reliance on short-term financing to manage its operations.

In Axfood's case, the negativity is primarily driven by a ballooning 'capital lease obligations' line item on their balance sheet. This suggests a deliberate strategy of utilizing leased assets, potentially real estate, to fuel expansion. This strategy, combined with a significant dip in 'inventory' compared to previous quarters, hints at a potential reduction in their focus on traditional grocery operations.

Could this be a sign of Axfood branching out into new, less inventory-heavy ventures? Consider their recent forays into e-commerce, online pharmacies (Apohem), meal kit delivery services (Middagsfrid), and hybrid restaurant-market hall concepts (Urban Deli). These ventures, while still tied to the food and consumer space, require a significantly different operational model than their traditional grocery stores.

Shifting Resources: Capital Lease Obligations vs. Inventory

The following chart illustrates the contrasting trends of Axfood's capital lease obligations and inventory levels over recent quarters. The data suggests a strategic shift in resource allocation.

"Fun Fact: Did you know that Axfood owns and operates over 270 stores across Sweden under various banners, making it one of the largest food retailers in the country? They also employ over 13,000 people, contributing significantly to the Swedish economy."