Step One Clothing Limited (ASX: $STP) 1H24 Financial Results

Step One Clothing Limited (ASX: $STP) has announced its financial results for the six months ending 31 December 2023 (1H24). The company reported a 25.5% increase in revenue to $45.1 million and a 35.6% rise in EBITDA to $10.1 million compared to the prior corresponding period. Step One also achieved a gross margin of 81.2% and added 182,000 new customers, bringing its global customer base to over 1,540,000. The company's strong financial position with closing cash of $43.9 million and no debt reflects its robust performance.

Founder and CEO, Greg Taylor, on 1H24 Performance and Strategic Initiatives

Our strong performance during the first half of 2024 underscores the success of our profitable growth strategy. The strategic marketing initiatives directly led to our customer database growing to over 1,540,000 customers globally, up 40% from the 1,101,000 at 31 December 2022. The strength of our database and marketing has led to a pleasing 25.5% and 35.6% revenue and EBITDA growth respectively, reinforcing our market-leading position and the ongoing demand for our product. Sales of our women's range was 13% of total revenue in 1H24. We invested strategically in processes and capabilities to support our profitable growth mandate through the period. This half we focused our investment and energy on our AI capability for our marketing operation, which yielded greater efficiencies in the function. Our diversified sales channels have also played a pivotal role in our success this half. Notably, our partnership with Amazon contributed 6.1% revenue for the period, providing not only financial benefits but also enhancing the credibility and reach of the emerging Step One brand in both the UK and US.

Outlook and Corporate Strategy

Step One's strong financial position, expanding customer base, and strategic initiatives position the company for continued growth. The company's focus on growing the women's line, expanding the customer funnel via partnerships, broadening sales channels, and investing in capability and product innovation reflects its commitment to sustainable expansion. With a 100% payout ratio for the interim dividend and a commitment to aligning the interests of its investors with the company's financial success, Step One remains confident about the opportunities in each country and its ability to execute the company's strategy effectively. The company's outlook for the remainder of FY24 includes a focus on balancing growth with profitability across all markets and continuing to improve the customer experience.