Step One Clothing (STP) H1 2025 earnings summary

Executive summary

• Revenue for H1 FY2025 grew 6.8% year-over-year to AUD 48.1 million, with EBITDA up 10.4% to AUD 11.2 million and net profit after tax rising 15.1% to AUD 8.2 million.

• Strong cash position of AUD 43.8 million, debt-free, supporting a fully franked interim dividend of 4.4 cents per share, representing a 100% payout ratio.

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

• Focus on profitable growth, efficient customer acquisition, and adapting pricing and promotions to market conditions.

• Customer base exceeded 1.8 million, with a 69% return customer rate for the third consecutive period.

Financial highlights

• Gross margin declined to 78.0% from 81.2% year-over-year, reflecting increased promotional activity and value-conscious customer focus.

• Advertising costs reduced to 29.0% of revenue, down from 34.1% in the prior 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 obsolescence.

• EBITDA margin improved to 23.2% from 22.5% year-over-year.

Outlook and guidance

• No formal guidance provided for FY2025.

• Continued focus on expanding product range, acquiring new customers, and testing new channels for profitable growth.

• Strong financial position and capacity for expansion, with no debt and significant cash reserves.