The Management Board of Answear.com SA informs about preliminary selected sales data for Q3 2023 and 9 months 2023, together with comparative figures for Q3 2022 and 9 months 2022.

The Management Board of Answear.com SA (the _quot;Company_quot;) informs about preliminary selected sales data for Q3 2023 and 9 months 2023, together with comparative figures for Q3 2022 and 9 months 2022.

Preliminary sales figures for Q3 2023 and 9 months 2023:

- In Q3 2023, online sales (1) increased by 13.5% compared to the same period of 2022, amounting to PLN 276.3 million (Q3 2022: PLN 243.5 million). Online sales for 9 months 2023 amounted to PLN 827.0 million and increased by 36.2% when compared to 9 months 2022, with online sales of PLN 607.2 million recorded in that period;

- Sales revenue calculated in accordance with IFRS (2) for third quarter of 2023 amounted to PLN 272.6 million and increased by 16.7% when compared to Q3 2022 (PLN 233.5 million). Sales revenue for the nine months of 2023 amounted to PLN 827.0 million and increased by 36.1% when compared to 9 months 2022 sales revenue of PLN 609.2 million.

Company's Management commentary to the reported figures:

- the difficult macroeconomic conditions recorded in retail sales indicators caused that the market environment for the fashion industry is very challenging, and the slowdown and weakening consumer demand, the first signs of which the Company had already seen in the last weeks of June, were experienced throughout the whole third quarter of this year.

- In H1 2023, Answear has recorded sales revenues above its plans, and as a consequence the sell-out period were started with a well-sold SS23 collection and consequently low stock levels. Less pressure to sell below target margins meant that the Company did not engage itself in the aggressive price war which took place during the period, due to the activity of its direct competitors;

- the Omnibus regulations introduced by the Company in accordance with current legislation have resulted in fact that the price promotions now are being perceived by customers as less attractive. Online sales is based on_#160;gradual and several price reductions during the season, while the information resulting from the omnibus directive about the percentage reduction of the current promotional price of a product in relation to the last lowest price within a 30-day period is not that strong motivator to make a purchase decision as the previously used information about the discount in relation to the so-called _quot;first price_quot;;

- _#160;much longer summer period and exceptionally warm September, both in Poland and in other countries where Answear operates, resulted in sales registered significantly below the assumed targets: customers in that month are no longer interested in buying summer collections, and the need for purchase the autumn collection has been postponed;

- the PRM brand, which expands the Company's offer towards the luxury streetwear _amp; fashion segment, met its assumed budgets, except for the month of September, when lower demand was influenced by weather conditions;

- it is also worth to notice that the base of Q3 2022 is now more demanding and consequently lower dynamics growth in Q3 2023 was achieved when compared to the y-on-y dynamics recorded in the previous quarters of this year;

As per the opinion of the Management Board, sales performance below the plans will have an impact on the Company's profitability in this period. Despite this fact and all the factors described above, the Management Board of Answear.com SA indicates that the Company achieved positive sales growth dynamics in Q3 2023, and the dynamics recorded cumulatively in the 9 months of 2023 means that Answear.com SA remains on the position of one of the leaders in the fashion e-commerce industry.

 

 

Explanations:

 

 

(1) On-line sales means sales invoiced during the period, including also credit notes related to returns received and booked during the period and also including sales based on commission agreements with suppliers in its full price (net value) paid by customer. On-line sales include also charges invoiced to customers for shipments below the free delivery threshold.

 

(2) Sales revenues according to IFRS accounting standards include revenues from the sale of goods purchased for its own account as well as revenues from the sales based on commission agreement expressed as revenue from commission services being calculated as the difference between sales price invoiced to customer and value of merchandise sold. Sales revenue include also commission for running www.wearmedicine.com internet site and charges invoiced to customer for shipments below the free delivery threshold. Sales revenue figure is also adjusted by the value of provisions for the returns corresponding to sales transactions executed during reported period but expected to be processed in the next period. Moreover, it also includes provision for customer loyalty program accounted for sales recorded in reported period.

Disclaimer: The Company advises that the sales figures presented are preliminary and have been calculated in accordance with the best Management's knowledge at this stage and may differ from the final figures for 3Q 2023 and 9 months 2023, which will be published in quarterly report.