Eve Sleep has narrowed its full-year losses, but warned that it expects “subdued demand” to persist during the coronavirus outbreak.
The online mattress specialist posted a statutory loss of £12.1m in the year to December 31, 2019 – an £8m improvement year on year. Underlying EBITDA losses were reduced £8.5m year on year to £10.7m.
The bottom line progress came despite a fall in group sales. Revenues fell 19% to £23.9m during the year.
But Eve said its “sharpened focus” on profitable sales allowed it to enhance gross margins 70bps to 53.4%.
Eve said its current financial year had “started well”, but cautioned that “wider market uncertainty increased” during the first two weeks of March.
Although it saw “no noticeable impact on demand” or its supply chain during that period, the etailer admitted it suffered “some impact on traffic and consumer demand” last week.
Eve warned: “It is reasonable to expect somewhat subdued demand for a period of time while the Covid-19 situation prevails.”
However, despite the upheaval caused by coronavirus, Eve insisted that it remained “on course” to deliver “a significant EBITDA improvement” in its current financial year.
The business said that, since its “most significant costs” were associated with marketing spend, it has “significant flexibility” to control its outgoings. Marketing spend would “be kept under constant review”, it added.
Eve Sleep chief executive James Sturrock said: “We enter 2020 in good shape, with the benefits of the rebuild strategy becoming increasingly evident.
“We have award-winning products and an increasingly differentiated, premium brand position in sleep wellness compared to the more price-led, mattress-focused peers, underpinned by upgraded operational capability and a significantly reduced cost base.”
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