Step One Clothing (STP) H1 2025 earnings summary

Executive summary

• Revenue grew 6.8% year-over-year to AUD 48.1 million for 1H25, with EBITDA up 10.4% to AUD 11.2 million and net profit after tax rising 15.1% to AUD 8.2 million.

• The business remains debt-free and well-funded, with cash and financial assets totaling AUD 43.8 million at period end.

• Interim dividend of 4.4 cents per share declared, fully franked, representing a 100% payout ratio.

• Growth driven by expanded women's range, robust sale events, and high customer retention, despite softer new customer acquisition and challenging retail conditions.

• Focused on profitable growth, efficient customer acquisition, and disciplined marketing spend.

Financial highlights

• Australian revenue up 17.4% year-over-year, UK up 7.0%, US down 61.4%.

• Gross margin declined to 78.0% from 81.2% year-over-year, impacted by promotional activity.

• Advertising costs reduced to 29.0% of revenue, down from 34.1% last year.

• Operating cash flow was AUD 9.9 million, with higher inventory investment aligned to product expansion.

• Inventory increased by AUD 3.7 million to AUD 22.6 million, with a 5% provision for older SKUs.

Outlook and guidance

• No formal guidance provided for FY25; current half's performance is the best indicator for future expectations.

• Focus remains on profitable growth, product expansion, and channel diversification, with continued testing of new channels.

• U.K. prioritized for international growth; U.S. seen as a longer-term opportunity with a capital-light approach.