About You's sales grow but so do losses

Fashion e-tailer About You saw sales growing strongly in its latest financial year as the company invested in attracting more customers, improving its functionality and its products. However this also meant that losses grew, although not by as much as might have been expected.

And management remains confident in its long-term prospects with analysts also apparently upbeat, giving the results a general thumbs-up. 

Based on preliminary figures, sales in the 12 months to the end of February are predicted to have grown between 48.3% and 50.5% to a range between €1.73 billion and €1.755 billion. But the adjusted operating loss (EBITDA) is running at between €60 million and €70 million. If it can hit the middle of this range, it would beat expectations.

Last year’s EBITDA loss was €35.5 million.

Q4 revenues rose between 30.2% and 38.4% to reach a range of €400 million and €425 million as the company suffered due to supply chain issues and other pandemic-linked restrictions. However, this also meant that marketing spend was lower than expected during the quarter. Q4 was also loss-making on an adjusted EBITDA basis after a profit of €2.4 million a year earlier.

The company hasn't yet issued a forecast for the current financial year and will only do so when it presents its final figures in late May. It's unclear whether this forecast will be heavily affected by the current situation between Russia and Ukraine, although the company has seen trading volatility in its markets in Central and Eastern Europe.

But it remains confident about its long-term target of reaching break-even in the 2023/24 financial year and achieving sales of €5 billion two years after that. 

Analyst Pippa Stephens at GlobalData thinks the company is heading in the right direction having launched new websites across Southern Europe and the Nordics, as well as a Global Shipping Platform in December 2021, which allows it to ship to around 100 countries worldwide.

This is “driving it to acquire new customers and better compete with more mature online platforms such as ASOS and Zalando,” she said. “It also introduced more personalised features on its website, including product recommendations and fit assistants, helping shoppers to find suitable items more easily, making the shopping experience more convenient.” 

While these investments “continue to notably impact” About You’s profitability, “hopefully this will improve once it becomes more established”.

She also said its “abundance of influencer collaborations helps to set it apart from its rivals” in Germany. But she feels that “to become more recognised outside of its home market, the retailer should start collaborating with influencers based internationally too, as many of its current partners are not well-known outside of Germany”.