Redbubble reports disappointing start to FY23

Redbubble Group has today released its first half results for FY23. Total revenue for the group saw marginal growth from $341.6 million in 2022 to $343.8m for this half, a 1 percent growth. This follows a gross profit of $101 million, down 6 percent, or 11 percent on a constant currency basis. The Group reports a  GPAPA of $52 million, down 18 percent (20 percent on a constant currency basis), an EBITDA loss of $23 million, compared to a profit of $8 million in 1H FY22, and an operating cash inflow of $19 million, compared to an inflow of $51 million in 1H FY22.

Its not all doom and gloom for the marketplace with an NPAT of $30 million, compared to a loss of $1 million in 1H FY22, and a Marketplace Revenue (MPR) of $289.3 million, in line with last year and up 3 percent on Q1.

TeePublic continued to deliver a strong performance, with double-digit MPR growth resulting in its highest quarter to date. The company reportedly experimented with promotional initiatives to drive MPR growth and improve proportion of revenue from repeat purchases, which increased to 47 percent during the half, and drove a reduction to the Group’s 1H FY23 GPAPA margin to 17.9 percent from 22 percent in 1H FY22. According to the report,  The Group is particularly pleased by TeePublic‘s performance as it reinforces the conviction that the marketplaces are well placed to benefit from macroeconomic tailwinds over the long term. TeePublic’s performance also provides valuable insight into how the Redbubble marketplace can be improved, particularly in relation to content. Across both marketplaces, Apparel in the US remained relatively resilient. This was offset by the continued weaker performance in Redbubble’s more discretionary categories, such as Wall Art and Homewares.

The half also saw the company beginning testing of AI technology to understand how it could significantly enhance the Redbubble marketplace’s content quality and search and discovery experience. Early results are positive and expected to be implemented at scale in calendar year 2023

Looking further ahead, the group will be implementing cost-reduction initiatives aimed at returning the Group to cash flow positive by the end of calendar year 2023. Redbubble Group expects market conditions to remain challenging in the short term. Last month, the company announced it would be implementing a number of cost-saving initiatives expected to reduce cost base by approximately $20 million to $25. Initiatives include suspending investment in the Redbubble brand awareness project, reducing workforce by approximately 20 percent, and reducing general costs to align with business priorities and scale.

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