About You expects macroeconomic headwinds to impact annual results

About You Holding SE has confirmed its revised revenue guidance for FY 2022/2023, reflecting macroeconomic headwinds and declining consumer sentiment across Europe that have resulted in higher inventory levels across the fashion industry and growing pricing pressure.

The company said in a release that despite the impact of these developments on customer behaviour, About You grew its number of active customers by 26.8 percent to 12.3 million and revenue by 8.9 percent to 430.6 million euros in the second quarter.

Commenting on the second quarter trading, Tarek Müller, co-founder and co-CEO of About You said: “We delivered an encouraging performance this quarter, despite a slowdown in the global fashion e-commerce market and continued macroeconomic uncertainty, demonstrating the resilience of About You’s unique business model. We remain mindful of the potential impact of the ongoing market volatility and have revised our guidance for FY 2022/2023 accordingly.”

Highlights of About You’s Q2 results

The company added that the impact of increased macroeconomic uncertainty on customer behaviour has resulted in a lower average order value, while an enhanced product offering led to an increase in the average order per customer. Average order value decreased by 5.2 percent to 55.5 euros, driven by an increase in discount levels as well as higher return rates compared to the previous year, while the average order frequency per active customer increased by 4.2% to 3.

In the company’s commerce business, the DACH segment achieved revenue growth of 4.7 percent to 206.7 million euros during the quarter. The Austrian and Swiss markets continued to grow, while the German market was affected by a decline in consumer sentiment. Revenue in the RoE segment increased by 28.6 percent to 209.5 million euros, supported by media and branding campaigns that improved performance and brand awareness and resulted in healthy growth in the Nordic and Southern European markets.

The B2B business reported in the segment TME showed revenue growth of 17 percent to 46.2 million euros, even as many B2B customers saw their own online revenue adversely affected amid macroeconomic uncertainty and are confronted with strong comparables from last year. The company further said that the revenue growth was further supported by up-selling of customers into other B2B products which increased revenue from individual customers.

About You’s profit drops in Q2

However, the company’s profitability was affected by a slowdown in revenue growth and a cost structure that was originally designed for business recovery from the second quarter onwards, resulting in an increased fulfilment cost-to-revenue ratio. Consequently, the adjusted EBITDA amounted to negative 42.8 million euros compared to negative 13.1 million euros in the same quarter last year, corresponding to an adjusted EBITDA margin of negative 9.9 percent compared to negative 3.3 percent.

“Economic headwinds have put more pressure on the fashion e-commerce market and made it harder to predict customer behaviour. We expect these challenging conditions to persist for a while, so we are taking swift and decisive measures to enable us to return to our growth trajectory over time and navigate the expected market volatility,” added Hannes Wiese, co-founder and co-CEO of About You.

On Group level, revenue growth for FY 2022/2023 is expected to be in the range of 10 percent to 20 percent year-on-year, equivalent to 1,905 to 2,078 million euros. Adjusted EBITDA is expected to decrease to negative 140 to negative 120 million euros with a margin of negative 7.3 percent to 5.8 percent.