Interim report for Second Quarter of financial year 2007/2008 - Another strong quarter

Second Quarter (December 2007 - February 2008)

  * KappAhl's net sales for the period (excluding VAT) amounted to
    MSEK 1,132 (1,088), an increase of 4.0 percent.
  * Operating profit amounted to MSEK 118 (117). Operating profit in
    the previous year was affected positively by non-recurring items
    for an amount of MSEK 13. Excluding non-recurring items, profit
    increased by 13.5 percent.
  * The gross margin amounted to 59.6 percent (57.7) and the
    operating margin was 10.4 percent (10.8).
  * Profit after taxes amounted to MSEK 74 (338), which is equivalent
    to SEK 0.99 (4.50) per share. Profit after taxes in the previous
    year was positively affected by tax revenue of MSEK 270.
  * Cash flow from operating activities totalled MSEK 183 (104).

First six months (September 2007 - February 2008)

  * KappAhl's net sales for the period amounted to MSEK 2,379
    (2,277), an increase of 4.5 percent.
  * Operating profit amounted to MSEK 324 (303). Operating profit in
    the previous year was positively affected by non-recurring items
    for an amount of MSEK 13. Excluding non-recurring items, profit
    increased by 11.7 percent.
  * The gross margin amounted to 61.9 percent (60.1) and the
    operating margin was 13.6 percent (13.3).
  * Profit after taxes amounted to MSEK 212 (461), which is
    equivalent to SEK 2.83 (6.14) per share. Profit after taxes in
    the previous year was positively affected by tax revenue of MSEK
    270.
  * Cash flow from operating activities totalled MSEK 379 (313).


CEO's comments
Sales in December were weaker than expected. Despite this, successful
efforts in the traditionally weaker months of January and February
allowed us to deliver a strong second quarter. I am particularly
proud of our strong gross margin - this is only achievable if the
entire chain including purchases, logistics and sales, functions
well. With contracts for 46 new stores, we also look forward to
improved growth.
In summary, KappAhl is continuing with its strategy of constant
improvements and we are now presenting our 23rd consecutive quarter
with improved profit. This demonstrates that we have a strong concept
and a solid business model.
Christian W. Jansson
CEO

For further information, please contact
Christian W. Jansson, CEO Tel. +46 (0)70 995 02 01
Håkan Westin, CFO Tel. +46 (0)70 471 56 64
KappAhl Holding AB (publ), Box 303, SE-431 24 Mölndal.

KappAhl is a leading fashion chain with around 4,000 employees and
nearly 300 stores in Sweden, Norway, Finland and Poland. KappAhl
sells value-for-money fashion for many people - men, women and
children - but focuses particularly on women from 30 to 50. All
clothes are designed by in-house designers. In 1999, KappAhl was the
first fashion chain in the world to be environmentally certified in
line with international standards. The head office and distribution
centre are located in Mölndal, on the outskirts of Göteborg. In the
12-month period that ended on 31 August 2007, KappAhl's net sales
were SEK 4.5 billion and the operating profit was SEK 618 million.
KappAhl is listed on the OMX Nordic Exchange Stockholm. Further
information about the company is available at: www.kappahl.com and
financial information is available at: www.kappahl.com/ir.

The full report with tables can be downloaded from the following
link: