STP - Step One Clothing

[Dona Ferentes]

Step One Clothing Limited (STP) commences trading on the ASX

Highlights:

• Trading in shares of Step One commences on the ASX today at 11.00 AEDT following a successful IPO to raise $81.3 million at $1.53 a share
• Primary capital raise to support future growth including international expansion
• Brand owner and digitally native direct-to-consumer retailer, focused on innovative, high quality, organic, ethically produced, and sustainable innerwear
• Founder-led business with highly scalable model and strong growth track record

Step One Clothing Limited, a leading online, direct to consumer, innerwear brand, will commence trading on the Australian Securities Exchange (ASX) today at 11.00 AEDT under the ASX Ticker STP. The listing follows a successful fully underwritten initial public offering, raising $81.3 million at $1.53 per share. Primary funds raised will be used to support the Company’s growth strategies, including growing Step One’s existing customer base in Australia and the UK, and investing in establishing a presence in the US.

Founded in 2017, Step One is focused on high quality, organic, ethically produced, and sustainable products in the innerwear category. Company growth strategy is focused around three pillars: strengthening brand equity, product development to specialise in the innerwear market, and continued international expansion. This growth strategy will come to fruition through the recent expansion into the US, and the broadening of its product range into the sports and womens underwear market.

Step One operates within a large global industry with the potential to capture further market share globally. Research by Frost & Sullivan reveals the global underwear market is worth approximately $150 billion and growing, with a clear trend towards increasing online sales, linked to increased adoption of mobile technology, and 24/7 convenience.

Founder and CEO Greg Taylor said an IPO reflects the best option to provide the funding needed to support Step One’s next stage of growth, and its vision of becoming an innovative and ethical global brand:

I am very excited that today Step One has listed on the ASX. I created Step One to solve the problems of chafing, ride up and managing sweat. In addition to creating an innovative product, it is also made from organic and sustainable materials. I am looking forward to continuing to build the Step One brand as we expand offshore

I am pleased with our year to date sales performance in the lead up to the November Black Friday Cyber Monday sales event. I am also pleased to confirm our US launch commenced as planned during October. Sales are being fulfilled from a third party logistics provider in the USA and initial results are consistent with our expectations.

...... and on Day One of listing, STP opened strongly, at $2.70 , traded down to $2.42 and now $2.64

 

[KevinBB]

There is too much hype about this one for my liking. Spamming the television with advertisements. Costs must be enormous.

I'm staying out until it has a good, profitable, history. Let my system buy it when the time comes.

KH

 

[sanketkarkare]

I am tempted to buy this one as a sector play. online underwear purchase is something that should only become popular in coming months/years. Don't see too much of a downside risk with step one. Any thoughts?

 

[frugal.rock]

Any thoughts?

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[galumay]

Don't see too much of a downside risk with step one. Any thoughts?

Well the first downside risk that occurs to me is total and permanent loss of capital. So I would want to understand the financials to try to quantify that risk. If its a profitable business with sufficient strength on the balance sheet then the next question is whether it can scale into an international market. Prior to listing it was a very small private business, so there needs to be a lot of high level execution to translate that into a successful public company expanding into offshore markets.

Personally I think I would wait and see if the business de-risks as it executes. I am always wary of investing too early in new businesses. There are a few years of Annual Reports for the private company available, so it possible to work out what the business operations looked like from a financial perspective. The hard part is trying to think about what the revenue, costs, margins etc look like as the business tries to grow offshore and how aligned the management is with shareholder interests.

 

[frugal.rock]

 

[Dona Ferentes]

ouch. price elasticity. Snap.

Step One now expects sales revenue growth to be 15-20%, compared to previous guidance of 21-25%. Expected proforma EBITDA is revised to $7.0-$8.5m from $15m.

 

[frugal.rock]

Even my quant pole won't have me into this.

 

[Country Lad]

Came up in scans the last few days. Other than wearing them, undergarments is not something I have a knowledge of but an interesting article in LiveWire. Probably not for me.

14TH SEP, 23
Step One Clothing Limited (ASX: STP)

Step One, a leading online clothing and undergarment company, shares increased after the FY23 results were released on 24 August 2023. Shares ended up 68.6% for the month.
The company, which sells its products globally, posted a year-on-year (YoY) decline in revenue, with revenue coming in at $65.2 million compared to $72 million in the prior year. The company experienced tough trading conditions with revenue down in all markets (Australia, UK and US) with weak consumer sentiment weighing on sales. While revenue declined, proforma EBITDA increased to $12 million compared to $9.0 million in the prior year and proforma NPAT increased 61.7% to $8.6 million. The results reflected the priortisation of profitability over top-line growth. On the back of the result, the company declared an inaugural dividend of 5 cents per share.

The company reported strong gross margins of 80.7%, although this was down from 82% in FY22. The average value of orders increased by 19%, and the company added 257,000 new customers, bringing the total number of customers to 1.358 million. The company has a strong balance sheet with cash on hand of $38 million and no debt.

Step One Founder and CEO, Greg Taylor said: “I’m pleased with the strong profit result achieved by StepOne in FY23, reflecting our pivot from prioritising top-line growth to profitability in response to challenging trading conditions in our key markets.” “We continue to build our position as a leading brand for sustainable and high-quality innerwear products for both men and women. During the second half, we explored product adjacency opportunities within the women’s segment, successfully launching a new Bikini Brief line that has resonated well with our customers.” “We are mindful of our elevated inventory position, and while this has helped us in managing global shipping delays to date, we will maintain a prudent approach to inventory management. This involves focusing on reducing the levels of
existing inventory SKUs while ensuring we maintain the flexibility to support new product launches.”
The company will seek to pursue profitable growth in Australia and the UK while continuing to balance growth and profitability in the US. The company’s focus in FY24 will be on improving the customer funnel, expanding partnerships, expanding the product range, investing in production capability, expanding sales channels and marketplaces and improving the customer experience.

 

[Belli]

Probably not for me.

The share or the underpants?

Sorry, it was there and somebody had to do it.

 

[Dona Ferentes]

The share or the underpants?

... all will be revealed this week.

online, direct to consumer, innerwear brand, will announce its 1H24 result for the 6 months ending 31 December 2023 on Tuesday 20 February 2024.

since listing :

 

[Country Lad]

... all will be revealed this week.
:

Embarrassing in a number of ways.
1. I said "not for me"
2 at the time it was steadily increasing
3. the chart looked good at the time
4. one of the members in our private trading group who is a bit of a guru in on-line marketing reckoned it was going very well in the market

Good result today in announcement

and market responded

 

[Dona Ferentes]

Embarrassing in a number of ways.
1. I said "not for me"
2 at the time it was steadily increasing
3. the chart looked good at the time

but then things sagged a bit, only to get a bit of a lift today...

Good result today in announcement

again...

Trading update : Step One now expects its FY24 financial results to be:
• FY24 revenue: $84 million (FY23: $65 million), representing over 29% growth on the prior corresponding period.
• FY24 EBITDA: $17 million (FY23: $12 million), reflecting over 42% growth on pcp.

Step One Founder and CEO, Greg Taylor said:
“I am pleased to report another period of profitable growth for Step One. Our high-quality sustainable innerwear products, in-house marketing capabilities and brand ownership continue to resonate well with customers. With a strong financial position, we are well positioned to continue expanding our customer base, establish new retail partnerships and grow our brand presence globally. I remain very confident that Step One is in a strong position to continue its profitable growth.”

Step One plans to report its FY24 financial results on 21 August 2024.

 

[Dona Ferentes]

now $1.70

Step One founder and CEO Greg Taylor recently sold around 9% of the company's issue capital. Although it's normally not a great sign to see management sell shares, Taylor still owns a significant amount of the business.

After the sale of the shares, it was disclosed that Taylor would retain approximately 57.9% of the business, remaining Step One's largest shareholder. The sale was driven by "strong investor demand and enhances liquidity and free float broadening the share register".