Release Date: August 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Boozt AB (BOZTY, Financial) achieved an 11% revenue growth in Q2 2024, driven by a strong reception of the Spring/Summer collection and favorable weather conditions in the Nordics.
- The company attracted nearly 300,000 new customers in the quarter, indicating strong customer acquisition despite challenging market conditions.
- Active customer base increased significantly, with Boozt.com growing by 7% and Booztlet by 16%, showcasing effective customer engagement strategies.
- All product categories experienced growth, highlighting the strength of Boozt AB (BOZTY)'s Department Store model.
- The company maintained a solid cash position and announced a new share buyback program of up to SEK200 million, reflecting confidence in its financial stability.
Negative Points
- The gross margin was under pressure due to limited availability of campaign goods, impacting the ability to offer competitive deals.
- Fulfillment costs increased slightly due to the implementation of transfer cells, affecting the adjusted EBIT margin.
- The trading environment remains challenging with muted consumer sentiment, leading to a cautious outlook for the rest of the year.
- Revenue growth guidance for the year was narrowed to 7% to 11%, down from the previous range of 5% to 15%, indicating uncertainty in achieving higher growth.
- The promotional environment remains competitive, with consumers being price-sensitive, which could impact future profitability.
Q & A Highlights
Q: How does the limited availability of campaign goods impact Boozt's gross margin, and should we expect a similar effect in the future?
A: Sandra Gadd, CFO, mentioned that while the limited availability of campaign goods does impact the gross margin, Boozt is mitigating this by stocking up on never-out-of-stock items. However, there is still a risk to the gross margin in a tough trading environment.
Q: Can you quantify the fulfillment costs related to the implementation of transfer cells, and how will this affect future quarters?
A: Sandra Gadd, CFO, explained that the temporary fulfillment costs due to testing and maintenance were higher, but they expect the full-year fulfillment cost ratio to be better than last year. The bulk of these costs were taken in Q2, with a lesser impact expected in Q3.
Q: What is Boozt's strategy to achieve the target of a 10% EBIT margin by 2028, given the current market conditions?
A: Hermann Haraldsson, CEO, stated that the path to a 10% EBIT margin will not be linear and may be bumpy. The current midpoint of guidance is slightly down, but they remain confident in their long-term target despite the challenging market.
Q: How has the weather impacted Boozt's sales, and what are the expectations for the upcoming seasons?
A: Hermann Haraldsson, CEO, noted that improved weather in April and May positively impacted sales. They hope for weather that is true to season, as it aligns with their sales cycles, but acknowledge that consumer sentiment and market conditions are also significant factors.
Q: What is Boozt's current inventory position, and how does it prepare them for the upcoming high season?
A: Hermann Haraldsson, CEO, stated that Boozt's inventory position is solid, with good sell-through of Spring/Summer collections and no old stock issues. They are well-prepared for the upcoming season, although they would prefer more campaign goods.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
