Footasylum boomed last year but current market is tough
Footasylum proved just how buoyant the branded sports footwear and sports-influenced clothing market is compared to other fashion categories when on Tuesday it delivered its first set of full-year results as a listed company to the stock exchange.
And what a set of results they were, although it wasn’t 100% good news and the company also said that the start of the new year has been tougher.
In the 52 weeks to February 24, revenue rose 33% to reach £194.8 million, and adjusted Ebitda was up 12% at £12.5 million, while adjusted pre-tax profit rose 4% to £8.4 million.
The company said it saw strong growth across all channels and product categories and, importantly, online sales rose 41% and now account for 30% of its total revenue.
But the adjusted Ebitda margin of 6.4% was down from 7.6% due to lower gross margin and planned investments in central functions.
All product categories across almost 300 brands delivered strong growth in the year. Clothing saw the largest increase, up £28.1 million, or 50%, to £84.4 million. Footwear increased 21% to £102.6 million, and accessories which remain a small proportion of overall revenue, were up 30% to £7.8 million. Footwear remained the largest product category, representing 53% of FY18 revenue, but that percentage is falling as the company invests in boosting its clothing and accessories offer.
The company open 10 new stores during year as well as revamping and upsizing others and continued to invest in its websites, as well as in apps for Footasylum, Kings Will Dream and Seven.
It also doubled its distribution space, invested in a new in-house studio for design, photography and videography and its new wholesale channel created opportunities for its own brands. So it's no surprise that its headcount grew by 21% to almost 2,300 employees at year-end.
So what did CEO Clare Nesbitt have to say about all this? “We are pleased to report a strong performance for the financial year, our first as a quoted company following our successful IPO last November,” she said. “We have delivered broad-based growth across all of our channels and product categories, while also continuing to invest in our infrastructure and talent in order to support further long-term expansion.”
But she added that while the company’s core target market of the 16 to 24-year-old consumer has proved to be “comparatively resilient in a downturn,” its trading since the beginning of the new financial year has “undoubtedly been impacted by the widely documented weak consumer sentiment on the high street.”
Yet she remains confident that continued investment in digital and in its stores will allow the company to deliver “strong revenue growth for the full year in line with market expectations.”
The investment includes increased spend on its consumer offering ahead of its usual peak trading period in the second half and delivering additional store upsizes alongside new store openings. However, this will mean an associated increase in both expected capex and property costs for the current year and as a result. That means adjusted Ebitda for FY19 is likely to show more modest growth than in FY18.
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