Online print designer Redbubble [ASX:RBL] said that for the period ending 31 December 2022, revenue rose a mere 2.2%, while marketplace revenue was little more than last year.
The artwork designs merchandiser saw its losses grow significantly from the prior year, from $1 million in 2022 to $29.8 million this last half year.
RBL’s share price sunk nearly 8% on the latest report, 14% over the past month, and nearly 72% in the past 12 months.
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Redbubble rides a slow first half
Today, Redbubble gave the full rundown of its profits, revenue, and sales operations for the first half of fiscal year 2023, explaining results were affected by soft demand, slowing markets with the group’s paid acquisition GPAPA taking most of its attention of late.
Redbubble reported that while its marketplace revenue (MPR) grew on a quarter-by-quarter basis, it was majorly flat on the same time last year, bringing $289.3 million in sales.
Revenue rose to $343.8 million in the six months ended 31 December, up from the $341.6 million a year earlier.
Gross profit was down 6% from $108.1 million to $101.3 million and the gross profit margin dropped 2.5 points year-on-year.
RBL’s net losses grew to $29.8 million in the first half, from $1 million a year earlier.
On a lighter note, after experimenting with some promotional ideas to boost its MPR growth, the group noted a rise in repeat purchases by around 47%. The group will be using this feedback to further promote and protect margins in future campaigns.
Michael Ilczynski, CEO of Redbubble, remained optimistic of long-term goals, despite the challenging environment:
‘We are particularly pleased by TeePublic‘s performance as it reinforces our conviction that the marketplaces are well placed to benefit from macroeconomic tailwinds over the long term.
‘As we look ahead, we expect market conditions to remain challenging in the short term. Accordingly, we have narrowed our near-term priorities to focus on those which will assist us to improve our GPAPA margin and accelerate our return to cash flow positive. We have also implemented a number of cost-saving initiatives, which we expect will reduce our cost base by approximately $20 million to $25 million on an annualized basis.’
Redbubble’s outlook
Redbubble’s cost-reduction initiatives may usher its group closer to positive cash flow by the end of the calendar year.
However, the company admitted that much of is attention has been on maximising its paid profit acquisition, GPAPA, and this has resulted in RBL having to revise its guidance to below FY22’s revenue.
The group also said there has been a continued softness in demand, particularly in the US and UK, which has also contributed to the decision to lower guidance.
In terms of GPAPA margin guidance in FY23, the group expects it to be higher than 1H FY23, but again below FY22 figures.
Redbubble expects operating expenditure to be between $125–$135 million, not including one-off restructure costs of approximately $2.1 million in Q3 FY23.
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Regards,
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