U.K.-based sportswear company Gymshark realized a 38 percent decline in annual profit to £22,529,000 (€25.5m) versus £36,497,000 for the FY ended July 31, 2022. Ebit slid by 39 percent to £27,837,000 (€31.5m), and annual operating profit was down by 37 percent to £29,561,000.
The company generated lower profitability despite a 21 percent increase in total revenues to £484.5 million (€547.8m), 13.9 percent more orders, and a 16.7 percent improvement in international sales. The group cited increased discounting, one-off costs related to establishing U.S. distribution centers, restructuring expenses and pre-opening expenses related to its Regent Street store as the principal reasons for its lower Ebit.
Gymshark generated more than 99 percent of its FY revenues from the direct-to-consumer channel, whose sales increased by 20 percent year-over-year to £488.3 million (€544.2m). Regionally, European sales excluding the U.K. rose by 32.0 percent to £111.5 million (€126.1m); lifted 3.0 percent higher in the U.K. to £89.0 million (€100.5m); jumped by 25 percent in the U.S. to £228.4 million (€258.2m); and increased by 15.0 percent in the Rest of the World to £55.6 million (€62.9m).
Founder and majority shareholder, Ben Francis, became CEO at the start of the fiscal year. He will continue to drive the direction of the business with the assistance of other senior-level personnel and General Atlantic, the group’s private equity minority shareholder.
