MySale, the parent company of Cocosa, recently disclosed some disappointing news regarding its first half trading performance, reporting an expected underlying EBITDA loss for the period. The challenges faced in the six months leading up to December 31 were mainly attributed to market disruption caused by changes in Australian GST regulations, as well as issues related to product mix and inventory management. Furthermore, a decline in revenue was experienced due to a planned reduction in offline activities during the fiscal year, adding to the already complex trading environment.
Operating in the UK, Australia, and the US, MySale is a publicly-listed entity that runs flash sales websites in several countries, including Australia, New Zealand, Asia, and the UK. In response to the hurdles encountered in the first half of the financial year, the company has taken steps to boost operational efficiency, rationalize its operations, enhance its technology platform, and refine product sourcing in order to improve gross profit margins. Despite these efforts, the financial results for the six months were not as favorable as anticipated, with group revenue decreasing by 17% to A$126 million and online revenue dropping by 13% to A$120 million. Gross profit also took a hit, plunging by 35% to A$29.5 million, resulting in a lower gross margin of 23.4% as compared to 30.2% in the preceding year.
Although active customer numbers saw a decline of 7% to 0.9 million, MySale highlighted that customer average order value (AOV) and order frequency remained stable. However, the underlying EBITDA loss of approximately A$5 million represented a significant downturn from the previous year’s profit of A$5.5 million. Despite these challenges, MySale experienced an increase in its cash balances surpassing initial expectations, leading the board to express confidence in the company’s capacity to enhance its performance in the latter half of the financial year and meet market expectations for the full-year results.
CEO Carl Jackson acknowledged the unsatisfactory performance in the first half, affirming that prompt action had been taken to tackle the prevailing issues. The company’s efforts to streamline and automate operations have been expedited, showing initial positive outcomes. Additionally, the adjustments in the product strategy are progressing well and are anticipated to be finalized in the second half of the year.
Though MySale faced setbacks in the initial half of the financial year, the company remains resolute in overcoming its challenges and achieving improved performance in the upcoming months. With a well-defined action plan in place, MySale is optimistic about its future trajectory and endeavors to ensure that the full-year outcome aligns with market expectations.
For more information on MySale and its recent challenges, you can visit their official website here. Additionally, for insights on the retail industry and market trends, you may find this article helpful: https://www.forbes.com/retail.
