Boozt AB’s Q3 report, January 1 – September 30 2019
Net revenue growth of 22% (local currency 22%) in the third quarter with 19% growth in Boozt.com and 90% growth in Booztlet.com. The adjusted EBIT margin improved to -3.6% (-4.0%). For the first nine months net revenue growth was 26% (local currency 25%) with an adjusted EBIT margin of 0.3% (0.3%).
CEO Hermann Haraldsson says: ““The softening of the apparel market, especially in Sweden and Denmark, increased over the summer which is reflected in the 19% growth of Boozt.com in the quarter. Booztlet.com however continued the strong trajectory with a 90% growth in the quarter. We are pleased that we were able to execute strongly on our main key performance indicators; Customer satisfaction stays very high, average order value is on par with last year, and the new customer intake is still increasing year over year. Our balance sheet is strong with a healthy inventory, giving us flexibility to respond to the many opportunities that arise in a challenging market.”
“After a declining gross margin trend over the last couple of seasons, we have witnessed a slightly increasing gross margin in the beginning of the current Autumn/Winter season compared to last year. This is encouraging. For the quarter, however, the reported gross margin was down due to a different sales mix and an early write down of prior season Boozt.com stock. This stock can achieve a better margin on Booztlet.com during the current season, more than offsetting the negative impact from the write down. Despite the lower gross margin, the adjusted EBIT margin improved driven by scale effects within marketing and administration & other costs.”
“In October we made changes to the agreement structure with a large brand partner. We entered into a consignment-like agreement with the brand partner owning the inventory in our warehouse, which has the effect that only our consignment fee will be recorded as revenue. This impacts net revenue negatively, but also improves our net working capital ratio with approximately 1 percentage point. This change together with the fact we are entering more cautiously into the fourth quarter due to softer apparel markets in Denmark and Sweden, leads us to adjust our full year outlook on net revenue growth from previously above 27% to now between 23% and 26%. The outlook for the adjusted EBIT margin is upgraded from previously above 2.3% to now above 2.5% due to operational improvements. These improvements are a small first step in a number of operational improvement initiatives we have identified. These initiatives will play out over the coming years and allow for a continued high investment in growth simultaneously with reaching our mid term EBIT margin target of 6%.”
The outlook assumes constant currencies from the time of this announcement and for the remainder of the financial year.
Telephone conference / audiocast
Boozt’s Group CEO, Hermann Haraldsson, and Group CFO, Allan Junge-Jensen, will present the interim report at a telephone conference / audiocast at 09.30 CET on Thursday, November 14, 2019. The presentation will be held in English and will be followed by a Q&A session.
For presentation material or information about how to participate, please visit Boozt’s website.
For additional information, please contact:
Hermann Haraldsson / Group CEO / Phone: +45 20 94 03 95 / Email: heha@boozt.com
Anders Enevoldsen / Head of IR & Corporate Communications / Phone: +45 53 50 14 53 / Email: anen@boozt.com
This information is such information as Boozt AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 8:00 a.m. CET on 14 November 2019.
Boozt is a leading, fast-growing and profitable Nordic technology company selling fashion online. The Group generated net sales amounting to SEK 2.8 billion in 2018. Boozt offers its customers a curated and contemporary selection of fashion brands, relevant to a variety of lifestyles, mainly through its multi-brand webstore Boozt.com. The company is focused on using cutting-edge, in-house developed technology to curate the best possible customer experience. Besides Boozt.com, the company also runs the webstore Booztlet.com and retail stores Booztlet and Beauty by Boozt in Denmark. For more information, please visit booztfashion.com.
