Robust Omnichannel Sales Drive Q3'23 Revenue Surge, Profits Impacted by Development Costs

Strong omnichannel sales momentum, development costs drag on profitability # Q3'23 estimates:

(1) The company reported Q3 revenue of PLN 56m (+64% y/y, YTD +63% y/y). We assume offline sales reached PLN 7m, and online sales growth exceeded 40% y/y. The high online sales momentum is a result of both higher volumes and an improvement in average basket value. This second driver of AOV growth, which may have exceeded 20% in Q3, is in turn driven by the expansion of the bicycle range.

(2) GM. As in previous quarters of 2023, in Q3 we assume a further erosion of GM (-2pp y/y to 28%). Notably, as the tougher market environment requires more investment in prices, the percentage margin is also diluted by the increase in the share of bikes in revenue.

(3) SG&A. Despite the high sales momentum, the wsk. SG&A will increase y/y in our view (+3pp y/y). Growing SEO/SEM marketing, omnichannel construction costs and the dynamic development of the organisational structure including platforms are dynamically increasing the cost base (OPEX +80% y/y). As a result, Q3 EBITDA in our view fell y/y to PLN 1.5m (-40% y/y, EBITDA margin -5pp y/y).

 

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