Red Ink, Bubble Bursts for Local E-tailer
PUBLISHED
2021-04-22
Content
Pop goes another online bubble.
Shares in online retail and art marketplace Redbubble slumped more than 22% on Thursday after the company reported a number of “key misses” in a third-quarter trading update.
The print-on-demand firm - whose mask sales helped made it one of the biggest 2020 pandemic winners - hit a low of $4.22 after it revealing it had missed expectations on marketplace revenue, gross margins, and operating earnings in the March quarter.
The shares ended the day at $4.29, down 22.1%.
For the three months ended to March 31, the company said the gross transaction value increased 58% (79% in constant currency) to $134 million and marketplace revenue rose 54% (76% in constant currency) to $103 million.
Gross profit for the quarter was up 55% (78% in constant currency) to $40 million and EBITDA was $2.2 million.
The was EBITDA/Marketplace revenue margin of 2.1% for the quarter, down sharply from the first half margin of 13.8% - a fall that sent investors heading for the sidelines.
In the nine months ended March 31, Redbubble reported gross transaction value of $576 million and marketplace revenue of $456 million. This was up 85% and 82%, respectively, over the prior corresponding period.
The company said a strong Australian dollar weighed on its financial performance during the period. On a constant currency basis, gross transaction value would have been up 94% and marketplace revenue would have jumped 97%.
This ultimately underpinned a 100% increase in year to date gross profit to $184 million and EBITDA of $51 million.