Q2 2025 Boozt AB Earnings Call Transcript
Key Points
- Booztlet's revenue grew by 14% or 17% in local currency, driven by effective inventory clearance strategies.
- Strong free cash flow more than doubled to SEK186 million, supported by disciplined inventory management and customs repayment.
- The company repurchased SEK94 million worth of shares, with plans to increase the share buyback program from SEK200 million to SEK300 million.
- Operational cost improvements were noted, with fulfillment and admin costs improving by close to 2.5-percentage-points combined.
- Strategic initiatives in AI and hiring are expected to fuel future growth, enhancing customer experience and operational efficiency.
- Reported revenue declined by 3% due to a 3% currency headwind, with Boozt.com seeing a revenue decline of 6% or 3% in local currency.
- Adjusted EBIT margin for the quarter was 3.4%, down 1.5-percentage-points from last year, impacted by lower gross margins and higher marketing costs.
- Marketing cost ratio increased to 11.5% from 10.8% last year, with offline marketing not yielding expected returns.
- Consumer confidence remains low, particularly affecting demand in Denmark and the women's fashion category.
- Inventory levels were initially too high, necessitating clearance sales that impacted gross margins negatively.
Thank you, and good morning all, and welcome to our Q2 2025 call. Let's turn to the first slide. I think it's fair to say that the first half of the year has been challenging due to quite difficult market. Despite this, our revenue for the first six months was slightly positive in local currency. While this is below our long-term ambitions, we are satisfied with the performance given the strong consumer headwinds, particularly in Denmark.
Looking at Q2 was flat in local currency but with a 3% currency headwind our reported revenue declined by 3% to SEK1.8 billion. This is broadly in line with what we anticipated when we updated our guidance in April with the variation that May was significantly worse than we expected and June was stronger than anticipated. In the quarter, Booztlet continued its strong performance with revenue growing by 14% or 17% in local currency. The strong growth is a direct result of our inventory clearance strategy. As we have said earlier, our inventory going into the spring/summer season was too high
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