• Topline Growth: 6.3% for the year.
• Adjusted EBIT Margin: Increased to 5.7% from 5.2% last year.
• Q4 Revenue Growth: 4% increase.
• Booztlet Revenue Growth: 36% increase in Q4.
• Adjusted EBIT Margin for Q4: 9.9%, up from 7.7% last year.
• Share Buyback Program: SEK162 million in 2024, with a total program of SEK200 million.
• Revenue Growth Expectation for 2025: 4% to 9% increase.
• Adjusted EBIT Margin Expectation for 2025: 5.8% to 6.5%.
• Gross Margin for Q4: 37.5%, unchanged from last year.
• Net Cash Position: SEK795 million at the end of the quarter.
• Free Cash Flow for Q4: SEK625 million.
• Active Customers: Increased by 2% over the last 12 months.
• Average Order Value: Increased by 2% to SEK1,011.
• CapEx Expectation for 2025: SEK170 million to SEK200 million.

• Warning! GuruFocus has detected 6 Warning Sign with BOZTY.

Release Date: February 07, 2025

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

Positive Points

• Boozt AB (BOZTY) achieved a topline growth of 6.3% for the year, despite challenging market conditions.
• The adjusted EBIT margin increased to 5.7% from 5.2% last year, primarily due to the exemption from Norwegian customs.
• Booztlet revenue increased by 36% in the fourth quarter, driven by price initiatives.
• The company has successfully diversified its product categories, with more than 40% of sales now coming from non-fashion categories.
• AI and machine learning are being utilized to improve efficiency and reduce costs across various operations, including customer service and inventory planning.

Negative Points

• Overall revenue growth for the fourth quarter was only 4%, reflecting a challenging market environment.
• Boozt.com revenue declined by 2% in the quarter, impacted by low consumer confidence.
• The average order value on Booztlet decreased by 5% due to lower prices.
• The company faced a small currency headwind during the year, affecting growth in constant currencies.
• Despite an increase in active customers, the frequency of purchases has decreased as consumers remain hesitant to spend.

Q & A Highlights

Q: When you first announced your 10% margin target, you mentioned that winning the Norwegian tariffs case would accelerate reaching this target. However, the midpoint of your new margin guidance suggests a less than 1% improvement. Can you elaborate on this? A: Hermann Haraldsson, CEO: We are in a dynamic market and must respond to market conditions. While we aim for a 10% margin, the path is not linear. We are streamlining operations and adjusting to consumer sentiment, which impacts our progress.

Q: What is the availability of campaign goods for the spring-summer season, and what market growth do suppliers anticipate for 2025? A: Hermann Haraldsson, CEO: There is availability, but the question is how much we want to buy. The fashion market may not grow unless conditions change. Our growth will likely be driven by categories like kids, sports, and home, rather than fashion.

Q: Can you provide details on the extraordinary investment in marketing to expand product scope? A: Hermann Haraldsson, CEO: We prefer not to disclose specific figures to avoid revealing too much to competitors. However, we are reinvesting savings into marketing to support newer categories.

Q: How will the focus on non-fashion categories impact the gross margin and overall profitability? A: Hermann Haraldsson, CEO: The gross margin remains largely unchanged. Non-fashion categories have lower return rates, which supports profitability. The mix effect of these categories enhances order profitability.

Q: With the recent AI-driven workforce reduction, are you still on track to achieve the expected savings? A: Hermann Haraldsson, CEO: Yes, we have executed the reduction of 120 employees. Some costs are capitalized, so not all savings are immediately visible on the P&L.

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