Castore reports investment-driven loss, yet sales surge

Sportswear brand Castore has filed its financials for the year to 4 February 2024, during which time its emphasis on investments resulted in a loss, despite a significant surge in sales.

Castore shifted from a profit of 11.7 million pounds in 2022/23 to a loss of 21.5 million pounds in 2023/24, a decline that largely comes as a result of increased investment into people, systems and infrastructure, the brand noted in its filing with Companies House.

Such funding is associated with the company’s long-term growth ambitions, centred around disrupting the premium sportswear landscape globally.

As such, over the reported period, Castore appointed new senior hires, increased its average headcount, expanded its physical store and website presence to 68 and expanded its fulfilment capabilities, all of which it says are expected to deliver strong returns over the medium term.

“The directors are pleased with the progress that has been made in this regard, acknowledging that there has been short term dilutive impact on overall profitability, and are encouraged by the outlook, which, alongside continued sales growth, is expected to demonstrate improved cost efficiency, working capital improvements and the gradual optimisation of supply chain measures,” the report read.

Sales up 65 percent despite ‘macroeconomic headwinds’

Its growth profit margin fell from 69.9 percent in the year prior to 66.5 percent, while its operating profit before exceptional items came to 400,000 pounds, down from its previous 16.6 million pounds.

Despite the impact, sales continued to surge at Castore, rapidly increasing by 65 percent to 190 million pounds “despite a number of macroeconomic headwinds”.

The company credited a strong development in partnerships and mainline brand divisions for the growth, as well as the scaling of its offering internationally including with various sports clubs in different countries.