• Revenue Growth: Increased by 2% in the quarter, or 3% in local currency.
• Booztlet.com Revenue: Increased by 18%.
• Boozt.com Revenue: Declined by 1%, flat in local currency.
• Adjusted EBIT Margin: Improved to 2.3% from 1.2% last year.
• Gross Margin: 38%, down 0.9 percentage points from last year.
• Active Customers: Reached 3.8 million, growing by 7%.
• Cash Position: Solid, despite SEK134 million spent on share buybacks.
• Free Cash Flow: Negative SEK619 million, improved from negative SEK685 million last year.
• Net Cash Position: SEK8 million at the end of the quarter.
• CapEx: SEK42 million, down from SEK97 million last year.
• Workforce Reduction: 10% reduction in total workforce.
• Guidance Revision: Revenue growth now expected between 0% to 6%; Adjusted EBIT margin projected between 4.5% and 5.5%.

• Warning! GuruFocus has detected 2 Warning Sign with BOZTY.

Release Date: April 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Boozt AB (BOZTY) reported a 2% increase in revenue for Q1 2025, or 3% in local currency, driven primarily by strong performance from Booztlet.com with an 18% increase.
• The company expanded its customer base by 7%, reaching 3.8 million active customers across both platforms, with Booztlet.com seeing a 22% increase in active customers.
• Customer satisfaction remains high, with a Trustpilot score of 4.2 and a net promoter score of 74, indicating strong customer loyalty.
• The adjusted EBIT margin improved to 2.3% from 1.2% in the previous year, driven by efficiency gains in fulfillment and distribution, and exemption from customs in Norway.
• Boozt AB (BOZTY) completed a SEK200 billion share buyback program, maintaining a solid cash position and planning to launch a new buyback program at a comparable level.

Negative Points

• Revenue from Boozt.com declined by 1% in the quarter, reflecting cautious consumer behavior and less aggressive pricing strategies.
• The company revised its revenue growth guidance to 0% to 6%, down from the previous 4% to 9%, due to increased market uncertainty and unfavorable currency movements.
• The adjusted EBIT margin guidance was lowered to 4.5% to 5.5%, from the initial 5.8% to 6.5%, impacted by currency fluctuations and market conditions.
• Boozt AB (BOZTY) experienced a challenging operating environment with declining consumer confidence in the Nordics, influenced by geopolitical uncertainties.
• Inventory levels were higher than desired, leading to expectations of more discounting in Q2 to clear excess stock, particularly in autumn and winter products.

Q & A Highlights

Q: The lower guidance seems to reflect adverse effects movements. Can you offset this negative impact through pricing? A: Hermann Haraldsson, CEO: The guidance reflects a combination of lower demand and pricing pressure, not just effects. While effects play a role, the uncertain consumer environment is the main factor. Long-term, effects will be mitigated, but short-term impacts are acknowledged.

Q: Are the heavy fluctuations in demand consistent across all markets, and are any product categories more impacted than others? A: Hermann Haraldsson, CEO: Sweden and Norway performed well, while Denmark and Finland were more affected. The fashion category is heavily impacted, whereas other categories are less affected but still not performing as desired.

Q: With higher inventory levels, should we expect more discounting of autumn-winter products in Q2? A: Hermann Haraldsson, CEO: Yes, more discounting is expected in Q2 due to elevated inventory levels. Booztlet is being used to clear inventory, maintaining Boozt.com's premium brand. Consumers can expect good bargains in the coming months.

Q: What is different in the market now compared to the past few years, especially considering the strong growth in 2023? A: Hermann Haraldsson, CEO: The geopolitical situation, including trade tensions and military spending, has worsened consumer sentiment. Consumers are more cautious, impacting spending, especially in fashion. The market is more challenging now than in 2023.

Q: Despite strong Q1 margins, why is there caution for the full year? A: Hermann Haraldsson, CEO: Q1 margins were strong due to efficiency improvements, but the market worsened during the quarter. Overstock concerns lead to proactive discounting to avoid future stock issues. The cautious outlook reflects expected challenges in the coming months.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.