Step One has cited “difficult” trading conditions in the first quarter of FY23, reporting more challenges than Q1 FY22 across all markets.
Given the current market conditions, Step One has indicated it will prioritise profitability over growth.
In Q1 FY23, the company gained revenue of $13.1 million, which is 15% below the previous corresponding period. It also cited an EBITDA of $1.8 million in Q1 FY23, which is 14% of revenue.
At September 30, 2022, its cash was $26 million and inventory $30 million.
According to the company, first quarter profitability reflected the continuation of costs (such as COGS, distribution and transaction fees) incurred in 2H22 with a reduction in advertising spend and improved efficiency.
The Group said it is comfortable with its inventory levels given continuing global supply chain and shipping delays. Its inventory is not seasonal or perishable.
Founder and CEO Greg Taylor said he remains confident in Step One’s ability to execute its strategy going forward, “despite difficult global macroeconomic conditions.”
“Step One remains in a good financial position with strong cash on hand and a robust balance sheet.”
Step One is a direct-to-consumer online retailer for underwear. It operates in Australia, the US and the UK.