In The Style Group shares tumbled 34.9% to 48.5p in late afternoon trading on Tuesday after the fashion group announced an 85% drop in adjusted EBITDA to £551,000 in FY 2022 against £3.7 million in FY 2021.
The retailer swung to a pre-tax loss of £1.5 million from a pre-tax profit of £100,000 in the previous year.
In The Style confirmed a 28% revenue climb to £57 million compared to £44.7 million, with a direct-to-consumer revenue growth of 23% to £44.7 million from £36.4 million and a wholesale revenue increase of 52% to £12.6 million against £8.3 million.
The group highlighted its revenue growth was driven by ongoing expansion and optimisation of the influencer-based business model.
The firm also mentioned a gross profit increase of 22% to £25.1 million from £20.5 million, and a gross profit margin slide of 2.2% to 42.9% against 46.1%.
In The Style said its product cost increases were managed through direct-to-consumer, but reduced wholesale gross margin, and cost pressures remained as the group moved into the current year.
The company reported a 51% fall in net cash to £5.8 million compared to £11.9 million year-on-year.
FY 2023 guidance
In The Style commented it expected FY 2023 to remain flat, with a mid-to-single digit growth in direct-to-consumer revenue and a projected decline in wholesale channel revenue at a double-digit rate as the company focuses on its digital partners.
The fashion firm highlighted an expected adjusted EBITDA loss for the financial year of £2 million, with £500,000 in expenses used to move to its new warehouse by the end of September 2022 to improve fulfilment efficiency.
“I am pleased to report that in our first full year as a public company In The Style has delivered further strong revenue growth, representing almost +200% on a two-year basis. This has been supported by encouraging improvements across all our key customer and brand metrics,” said In The Style Group CEO Sam Perkins.
“We have a strong, inclusive brand and differentiated influencer collaboration model which gives us fantastic reach, highly effective marketing, and broad customer appeal. This underpins our long-term confidence to create one of the UK’s most exciting fashion brands.”
“This year is expected to be a challenging one for consumers and retailers. We are taking actions to respond including prudent cost control, cash management and executing against our refined growth strategy.”
