Boozt AB (BOZTY) Q2 2025 Earnings Call Highlights: Navigating Revenue Decline with Strategic ...
Booztlet Revenue Growth: Increased by 14% or 17% in local currency.
Boozt.com Revenue Decline: Decreased by 6% or 3% in local currency.
Adjusted EBIT Margin: 3.4%, down 1.5 percentage points from last year.
Gross Margin: 39.1%, down 2.7 percentage points from last year.
Free Cash Flow: More than doubled to SEK186 million from SEK90 million last year.
Share Buyback: SEK94 million worth of shares repurchased in the quarter.
Net Cash Position: SEK75 million at the end of the quarter.
Customer Metrics: 53% of customers bought from more than one category, up from 51% last year.
Average Order Value: Increased 2% to SEK934.
Fulfillment Cost Ratio: Improved to 10.5% from 11.4% last year.
Marketing Cost Ratio: Increased to 11.5% from 10.8% last year.
Admin and Other Costs Ratio: Decreased by 1.5 percentage points to 9.7%.
Financial Guidance for 2025: Net revenue growth of 0% to 6% and adjusted EBIT margin of 4.5% to 5.5%.
Free Cash Flow Guidance for 2025: At least SEK500 million.
Warning! GuruFocus has detected 3 Warning Sign with BOZTY.
Release Date: August 15, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Booztlet's revenue grew by 14% or 17% in local currency, driven by effective inventory clearance strategies.
Strong free cash flow more than doubled to SEK186 million, supported by disciplined inventory management and customs repayment.
The company repurchased SEK94 million worth of shares, with plans to increase the share buyback program from SEK200 million to SEK300 million.
Operational cost improvements were noted, with fulfillment and admin costs improving by close to 2.5-percentage-points combined.
Strategic initiatives in AI and hiring are expected to fuel future growth, enhancing customer experience and operational efficiency.
Negative Points
Reported revenue declined by 3% due to a 3% currency headwind, with Boozt.com seeing a revenue decline of 6% or 3% in local currency.
Adjusted EBIT margin for the quarter was 3.4%, down 1.5-percentage-points from last year, impacted by lower gross margins and higher marketing costs.
Marketing cost ratio increased to 11.5% from 10.8% last year, with offline marketing not yielding expected returns.
Consumer confidence remains low, particularly affecting demand in Denmark and the women's fashion category.
Inventory levels were initially too high, necessitating clearance sales that impacted gross margins negatively.
Q & A Highlights
Q: Can you provide insights into the start of Q3, considering the variations in April, May, and June? A: Normally, we don't provide current trading details, but I can share that we're back to growth, albeit modest. This supports our guidance for the second half. - Hermann Haraldsson, CEO
Q: The guidance range seems wide. Is the upper end of the guidance optimistic given H1 sales? A: It's a combination of easier comps, better stock alignment, and optimism for revenue. On costs, we're well-controlled, so the midpoint is a good bet, not the lower end. - Hermann Haraldsson, CEO
Q: Can you confirm the underlying margin in Q2 and Q3, excluding Norwegian import duties? A: We have a tailwind from customs of 0.7-percentage-points this quarter, with a full-year impact of around 0.5-percentage-points. - Sandra Gadd, CFO
Q: How has the FX rate movement affected your guidance? A: It's too early to say definitively, but our current guidance covers the changes. We'll be more specific in Q3 if needed. - Sandra Gadd, CFO
Q: What is the quality of your current inventory, and do you anticipate further clearances in Q3? A: Our inventory is in line with last year, and we have managed to clear excess stock. We are focusing on having the right inventory for Boozt.com, especially correcting for the women's category for fall. - Hermann Haraldsson, CEO
Q: Will the marketing spend in H2 be neutralized by increased fashion-related marketing? A: The marketing cost ratio was too high in Q2. We aim for a long-term ratio of 10% or below, and we are revisiting our strategy to increase category awareness effectively. - Hermann Haraldsson, CEO
Q: What drove the recovery in June, and was it widespread across regions? A: The recovery was driven by improved weather and consumer confidence. Denmark remains more depressed, while Sweden is performing well. - Hermann Haraldsson, CEO
Q: Have you seen any changes in competition from ultra-fast fashion players? A: Competition remains intense, but some ultra-fast fashion players are losing ground. The decline in women's dresses may be due to cheaper, trend-driven purchases. - Hermann Haraldsson, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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