Step One Clothing (STP) H1 2026 earnings summary

Executive summary

• Revenue for the first half of 2026 was AUD 36.3 million, down 24.5% year-over-year, reflecting a strategic shift away from discounting and slower clearance of legacy inventory.

• EBITDA loss was AUD 10 million, primarily due to a one-off AUD 10.9 million inventory provision; adjusted EBITDA was AUD 1 million.

• Indirect revenue channels grew 75.9% year-over-year, now representing up to 20% of total revenue.

• Net loss after tax was AUD 8.5 million, compared to a net profit of AUD 8.2 million in the prior period.

• Customer base surpassed 2 million, with a retention rate of 65%.

Financial highlights

• Adjusted gross margin was 73.2%, down 4.8 percentage points year-over-year; reported gross margin was 43.1%.

• Advertising costs rose to 31.2% of revenue.

• Operating cash flow was an outflow of AUD 1.4 million.

• Cash and financial assets stood at AUD 24 million as of December 31, 2025, with no debt.

• Significant inventory obsolescence provision of AUD 10.9 million recognized.

Outlook and guidance

• Focus remains on executing the reset plan, prioritizing product innovation, brand-led customer acquisition, scaling indirect channels, and expanding internationally.

• No full-year earnings guidance provided; dividends expected to resume when retained earnings return to positive.

• Brand discounting will be reduced to reinforce premium positioning.