Answear.com is back on an growth trajectory in Q3 2024

Answear.com, a leading e-commerce provider of fashion, home & lifestyle and outdoor products in the CEE region, summarizes its financial results for Q3 2024. Answear.com successfully returned to growth in the past period, despite the unfavorable macroeconomic environment. Revenue in Q3 2024 amounted to PLN 344 million, up 26 percent year-on-year. At the gross margin level, the Company generated a 29 percent increase y-o-y. to PLN 133 million. EBITDA, on the other hand, amounted to PLN 2.1 million, with the PRM brand contributing a small loss of PLN -0.4 million to the result. The solid results achieved in the past quarter provide a solid foundation for even better results in Q4, which is a key period of increased sales activity for the e-commerce industry.

- A challenging start to the year is behind us, but Q3 brought clear indications of a return to the growth trajectory to which we have accustomed our shareholders. Investments in marketing activities aimed at positioning the Answear brand in the premium segment are beginning to bring the first results. Already now, despite unfavorable macroeconomic conditions, we stand out from the competition, and the solid foundation built in previous periods gives us reasons for optimism for the future - comments Krzysztof Bajołek, CEO of Answear.com.

Online revenues in Q3 2024 amounted to PLN 350 million, up 27 percent year-on-year. It is worth mentioning that in constant currencies, ignoring negative exchange rates, we recorded online revenues higher by 36 percent y-o-y. with a value of PLN 375 million. The high sales growth is the result of, among other things, the effective use of the summer sales period, supported in July by extensive marketing activities. It is worth mentioning the consistent improvement in the sales performance of the PRM brand, which achieved more than threefold year-on-year revenue growth in Q3 2024.

- We are consistently implementing our strategy of premiumization of our offer, which is reflected in the growing share of premium brands, which reached 64 percent at the end of Q3. The average order value reached PLN 360 in this period. We are strengthening our position through non-standard marketing activities, including exclusive events and cooperation with selected brands. An important support in these activities are our concept stores, in a prestigious location, which are an excellent space for building a premium brand image - adds Krzysztof Bajołek.

In the past quarter, Answear.com and PRM acquired such brands as Nanushka, Hackett London, Baldinini, Common Project, Patou, Zhilyova, Forte Forte, Proenza Shouler, Le silla, Sportalm, Dynafit, Bogner, Sportmax, Axel Arigato, New Rock and Coperni, among others.

Answear.com not only returned to the path of revenue growth, but also significantly improved its profitability in the past quarter. It is worth recalling that in H1 2024 the Company invested a record PLN 141 million in marketing activities. The funds were allocated to an extensive campaign carried out in 11 markets, aimed at repositioning the Answear brand in the premium segment. In Q3 2024 alone, marketing expenditures amounted to PLN 62 million, which contributed to a reduction in the ratio of marketing costs to revenues - from 22.6 percent in H1 this year to 18.7 percent in Q3.

- Behind us is the first quarter this year in which we recorded an improvement in sales margins, despite the appreciation of the Polish zloty and the weakening of the Ukrainian hryvnia. The gross margin reached 38.6 percent, and we are pleased with the improvement in PRM margins as a result of optimization efforts in the area of marketing costs and improvements in the product offering. Q3 2024. EBITDA closed with a small loss of PLN -0.4 million. On the other hand, already in September PRM exceeded the break-even point, which means that it does not burden Answear.com's financial results - adds Jacek Dziaduś, CFO of Answear.com.