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Soft consumer demand dents Step One revenue

Online underwear retailer Step One Clothing says it prioritised profitability over growth as revenue slips in FY23.

For the year to June 30, sales fell 9.7 per cent to $65.2 million with a proforma tax-paid profit of $8.6 million, up 61.7 per cent, and EBITDA of $12 million.

“Step One continued to experience challenging trading conditions across all of its markets during the period, driven by weak consumer sentiment resulting from inflationary pressure and rising interest rates, which impacted discretionary spending,” the company said.

By region, Australia sales fell 7.7 per cent to $43 million followed by the UK at $20.3 million, down 7.6 per cent, and the US at $1.9 million, down 48.9 per cent.

The average order value during the year increased by 19.3 per cent to $89.49 as a greater emphasis was placed on upselling and bundling.

The company expanded its women’s line with the introduction of the women’s bikini brief in March this year.

Step One founder and CEO, Greg Taylor, said the results reflect the efforts taken by the company to pivot from top-line growth to profitability in response to challenging conditions in key markets.

“I am confident that as macro-economic conditions ease, Step One will be well-positioned to pursue international growth ambitions while maintaining a strong focus on profitability.”

In the upcoming year, the company says it will continue expanding its product range, customer funnel and partnerships with other retailers while also investing in product innovation and improving customer experience.

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