Online European furniture business Westwing has reported a decline in both second quarter and half year sales.
According to its latest trading update for Q2, total sales fell 21.8% to €103m from €131.7m, with an adjusted EBITDA also down 13.1% to a loss of €2.3m compared to its profit of €10.7m in 2021.
Half year sales for the retailer reached €214.1m, declining by 20.7% from €270.1m against the same period last year. Adjusted EBITDA resulted at a loss of €4m, down 34.3% from its profit of €30.3m year-on-year.
Both divisions DACH (Germany, Austria and Switzerland) and International (other EU markets) saw sales decline by 21.7% to €119.2m and 21.9% to €95m respectively.
Despite the decline, Westwing said that its average basket size rose 18% to €159, although active customers reduced 14% to 1.4k.
Its own ‘Westwing Collection’ share increased from 32% to 38% during the period, due by an expanded product portfolio with a higher share of furniture and overall better availability.
Looking ahead, Westwing said it expects no short-term improvements given the overall macro environment with accelerating inflation in its key markets, the war in the Ukraine, and a resulting material reduction in consumer confidence.
“Consequently, Westwing expects revenues for the FY 2022 between €410m and €450m with a growth rate of -22% to -14% (previously: lower half of guided Revenue range between €460m and €540m with a growth rate of -12% to +3%).
“Based on the adjusted growth expectations, additional margin investments to reduce inventory levels and already implemented cost reductions, Westwing now plans for an Adjusted EBITDA of €-15m to €0m at an Adjusted EBITDA margin between -4% and 0% for FY 2022 (previously: Lower half of guided Adjusted EBITDA range between €-9m and €+16m at an Adjusted EBITDA margin between negative 2% and positive 3%).
“While the Company remains very confident in the long-term Home and Living eCommerce market potential and Westwing’s strategy, it can at the moment, given the potential longer lasting macroeconomic challenges, not provide a reliable timeframe by when to achieve the communicated mid-term targets of €1bn in revenues and more than €100m Adjusted EBITDA. For FY 2023 Westwing expects to return to being at least Free Cash Flow neutral.”
