Step One Clothing Limited

ASX:STP

Step One Clothing Limited

ASX:STP
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$0.265 (-11.7%)
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#362
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2
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Reports (1) My Report Forum Investors
Forum Topics STP STP Pants Down of FY25 Results!

Pinned straw:
PortfolioPlus
Added 4 months ago

The unaudited results for FY25 indicate some concerns happening in 2HFY25.

Overall revenue came in at $86.9m up slightly on FY24 but this was due to the 1H results.

2H sales fell from $39.5m to $38.78m but the MAJOR problem centres around their EBITDA/Revenue margin. At just 16% this is well below the comparable figures of 23% for 1HFY25 & 22.6% for 2HFY24.

The cash assets reflect this worrying trend. At 1HFY25 we had cash and financial assets of $43.7m and just $33m for 2HFY25. Sure, the interim dividend of some $8.2m explains part of the fall – but given this is really a cash biz, where did the other $2.5m go. Inventory build-up in expectation of greater 2H sales??

I think FY25 signifies STP to be purely a one-product, income earning company attractive to those wanting the fully franked dividends.

Certainly, the days of growth are behind it unless it can find a new line of product to introduce to that valuable direct to customer database.

Hopefully the company can repeat the Final divvy of 2.8c which will make a grossed-up revenue stream of 10.28c – not bad the current SP of 76c, but will this be hammered today?

The company really needs to consider other products and perhaps other geographies.   
Schwerms
Added 4 months ago

Think it's hard to sell any of it full price of it's on sale so much the discounted prices are the actual prices, might get the odd sales not discounted.

I noticed over the last 12 months a lot of copycat ones popped up as well which can't be helping. I've got some that I like but I got advertising slam from at least 3 others on FB etc after I googled and bought some step ones after Greg was on SM last year.

Maybe the overseas expansion and foray into women's isn't going that well either?

15
Strawman
Added 4 months ago

The issue for me with StepOne has always been its basically a commodity product. Greg and team did an amazing job in creating a new form factor and in building a brand, but the apparent discounting needed to move stock shows that they really dont have that much pricing power.

Not much growth being priced in at present, so maybe there's a value play here. But not for me.

20
mushroompanda
Added 4 months ago

Agreed @Strawman

One could also argue the discounting problem was self inflicted. 50-70% off if you order a crapload of underwear during the sales periods.

Now that everyone knows that the big sales are always around the corner, why order at any other time?

af9dd6ad803f7564bd9af218711e6e53e50e1d.png

17
Strawman
Added 4 months ago

Great chart @mushroompanda, really illustrates the point.

Someone told me years ago that in retail you want to be either cheap and cheerful (compete on price with your edge being low cost operations), or compete on quality and flex your pricing power.

What you don't want is to be in the middle of the spectrum, where there is always someone offering a cheaper or better product.

Step One needs to pick a lane.

16
Valueinvestor0909
Added 4 months ago

Yet to read the content of forum. But 10/10 for the title.

10