Cult Beauty sales surge as it gains new customers in UK, Europe
Beauty e-tailer Cult Beauty has filed its full-year results for the 12 months to May 31 2020 and they show that it enjoyed what it called “another great year”, despite the pandemic impacting more than two months in the period.
In the report filed at Companies House, the firm said that its sales grew 37.8% to £123.4 million, with growth in every market and across all categories. The UK market saw the best growth with a 50.4% rise and it remains its largest single market, accounting for 47% of its total sales, which is up from 43% in the previous year.
It saw the biggest growth in skincare and haircare, although make-up "continued its dominant position in sales”, even though there have been widespread reports that make-up was a tough category to shift during lockdown.
During the year, the company also launched its first international domains as part of its ongoing international expansion with a .com website added to its existing offer on the .co.uk site. That international expansion included products listed in euros for the first time. The locally optimised Cult Beauty offer is now available in Ireland, Germany, Spain, the Netherlands, Italy, France, Poland, Slovakia, Slovenia, Cyprus and Malta.
As mentioned, the pandemic didn't seem to dent its business and it said that it saw “robust trading” during the first UK lockdown that started in March last year, with “substantial increases” in sales and new customers.
However, despite the big sales increases, gross profit as a percentage dipped ever so slightly from 27.7% to 27.5%. Given the challenging circumstances for part of the financial year, that’s a good result and it was helped by higher-margin sales due to the brand and category mix, although the higher cost of serving international markets offset some of the gains.
But the company managed to achieve a substantially higher operating profit of £6.4 million, up from £2.5 million a year earlier. Net profit was up to almost £5 million from £2.5 million and it said it has a “robust” balance sheet with an ending cash balance of £22.3 million due to “strong cash flows and efficient management of working capital”.
The company said that the sales growth during the year was ahead of its five-year plan and it expects more of the same on an ongoing basis. In many ways, the pandemic helped its operations as it drove a massive influx of new customers, which it presumably hopes to retain, even though physical shops are now open again. It said its marketing team is heavily focused on customer acquisition and retention “by combining tactical and engaging promotional activities”, to help with this. As a result, it predicts 2021 to see another year of record sales and profit.
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