Step One Clothing (STP) H1 2026 earnings summary

Executive summary

• Revenue for the half-year was AUD 36.33 million, down 24.5% year-over-year, reflecting a strategic shift away from discounting and slower clearance of legacy inventory.

• A one-off inventory provision of AUD 10.9 million to AUD 11.75 million significantly impacted reported profitability, resulting in a net loss after tax of AUD 8.47 million.

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

• New product launches in socks, pyjamas, and women's period products showed strong early customer traction.

• The business remains debt-free with cash and financial assets of AUD 24.01 million as of December 31, 2025.

Financial highlights

• Adjusted EBITDA was AUD 1 million, down from AUD 11.2 million in the prior period; reported EBITDA loss was AUD 10 million due to the inventory provision.

• 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, compared to an inflow in the prior period.

• Cash and financial assets stood at AUD 24 million as of December 31, 2025.

Outlook and guidance

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

• Brand discounting will be reduced to reinforce premium positioning.

• Dividend payments expected to resume when retained earnings return to positive.

• No financial guidance will be issued.