Articore Group (ASX: $ATG) 3QFY24 and YTD trading update

Articore Group Limited (Articore) (ASX: $ATG) has released its trading update for the third quarter of FY24 (3QFY24) and the nine months to 31 March 2024 (YTD), reaffirming its FY24 guidance. The update includes key financial metrics and the Group's outlook for the remainder of the financial year.

Executive commentary on 3QFY24 performance and FY24 outlook

Martin Hosking, Group CEO and Managing Director of Articore, highlighted the sustained improvement in unit economics, with gross profit up 4% on the pcp and gross profit margin increasing to 44.6%. He emphasized the Group's focus on driving profitable revenue growth and the ongoing efforts to achieve positive underlying cash flow for FY24. Hosking also acknowledged the disruptive impact of changes to Redbubble's paid marketing strategy in 3QFY24 and expressed confidence in the Group's ability to return to profitable revenue growth.

Summary of 3QFY24 trading update and FY24 outlook

Articore Group (ASX: $ATG) reported a 4% increase in gross profit for 3QFY24, driven by initiatives to improve unit economics. The Group's focus on profitability led to a 12% decline in marketplace revenue, reflecting its disciplined approach to paid marketing. Operating expenditure decreased by 25% on the pcp, demonstrating strong cost discipline. Despite the negative operating EBITDA and underlying cash flow in 3QFY24, the Group reaffirmed its FY24 guidance and remains committed to achieving positive underlying cash flow for the full year. Looking ahead, Articore aims to reinstate profitable revenue growth and maintain its focus on cost-saving measures to drive absolute GPAPA growth and optimize paid marketing activities.