Step One Clothing (STP) H2 2026 earnings summary

Executive summary

• Revenue declined 26.7% year-over-year to AUD 63.7 million (or $63.7 million), driven by a deliberate reset prioritizing brand equity and reduced discounting amid softer demand.

• EBITDA loss was AUD 7.4 million (or $7.4 million); adjusted EBITDA (excluding inventory provision) was a profit of AUD 1.7 million (or $1.7 million).

• Indirect channel revenue grew 62.3% year-over-year, now representing 18.2% of total revenue, with strong performance from Amazon, TikTok Shop, and John Lewis.

• Six new products were launched, but the women's range underperformed, down 35.7% and now about 15% of revenue.

• Customer database surpassed two million for the first time.

Financial highlights

• Adjusted gross margin was 75.9%, down 0.5 percentage points year-over-year; reported gross margin was 61.6%.

• Loss after tax was AUD 6.4 million (or $6.4 million); adjusted profit after tax was AUD 0.8 million (or $0.8 million).

• Operating cash outflow was AUD 2.7 million (or $2.4 million), compared to an inflow in the prior year.

• Cash and financial assets at year-end totaled AUD 25.8 million (or $25.8 million); business remains debt-free.

• Advertising and marketing costs rose to 33.1% of revenue.

Outlook and guidance

• Focus remains on executing the reset plan, expanding product adjacencies, and maintaining brand premium.

• No financial guidance issued; dividend declarations to resume once retained earnings are positive.

• Emphasis on sustainable, profitable growth and long-term value creation.

• Management expects the reset plan to take more time, with ongoing disciplined inventory clearance.

• Entering FY27 debt-free with a large customer base provides a strong platform for future growth.