Redbubble (ASX:RBL) pops lower on quarterly burst

Company News

by Melissa Darmawan

Online marketplace Redbubble's (ASX:RBL) headline figures showing a showed a deceleration in growth for the September quarter.

The eCommerce company's revenue sank 28 per cent to $106 million while its EBITDA tumbled 85 per cent to $3.9 million compared to the previous corresponding quarter.

Gross profit dipped 34 per cent to $42 million, while gross transaction value declined 21 per cent to $142 million, compared to the prior corresponding period.

One of the reasons why the company's performance was in the red was due to a reduced demand for masks. In the third quarter of 2020, mask sales contributed $57 million in revenue resulting in FY21 revenue of $497 million. However, the first quarter of financial year 2021 revenue included $29 million and first quarter financial year 2022, it included $4 million of mask sales.

Despite the headline figures looking stark, the company said that the results were in line with expectations.

The business continued to deliver initiatives and conduct experiments ahead of its half-year update. These include offering customers a buy-now pay-later payment option through Afterpay (ASX:APT) based in the US, Canada, UK and here in Australia. The company has 18 new products, and line extensions launched include dad hats, baseball caps, desk mats, mouse pads, and iPhone 13 cases.

Meanwhile, the online marketplace has put some focus on their retention strategy with 13 loyalty experiments completed. Seven of them show early signs of positive retention.

Looking ahead, the company expects that revenue growth in the first half of financial year 2022 will be negative year-on-year.

Shares in Redbubble (ASX:RBL) are trading 13.1 per cent lower at $3.96.
Image from Redbubble.

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