REDBUBBLE HAS BURST
THREE months after seeing the glass slightly half full, online arts marketplace Redbubble has cut back on full-year earnings expectations because of growing competition and shipping costs.
On Tuesday, Redbubble said first-half reported marketplace revenue would come in at $288m, down 18 per cent year-on-year and also off 18 per cent on a constant-currency basis. Full-year earnings before interest, taxes, depreciation and amortisation (EBITDA) margin as a per cent of marketplace revenue was now expected to be “negative low-single digits”.
EBITDA for the half year has dived 84 per cent to $8m, with the margin being 2.8 per cent. Shares in the company dived more than 22 per cent on the news and closed at $2.32 on Tuesday.
Growth transaction value (GTV) for Redbubble – used by 800,000 artists and creators to sell their artwork on everything from T-shirts to cushions – is expected to come in at $381m, down 14 per cent yearon-year.
Redbubble is expecting gross profit of $108m, down 25 per cent year-on-year.
The group’s October update had flagged a slightly higher revenue outlook because it was “continuing to retain the majority of the accelerated revenue growth” it saw in the previous financial year in the form of surging mask and homeware sales.
“Going back a year ago, we had some real Covid-19 winners,” chief executive Michael Ilczynski said.
”We saw that homewares grew way over 100 per cent year-on-year. But those areas that really took off, like homewares, wall art and masks, have come right back.”
Excluding masks, and on a paid basis, underlying marketplace revenue will be $283m, down 5 per cent compared to the previous year. Mr Ilczynski said the “medium-term aspiration” was to boost GTV to more than $1.5bn, artist revenue to $250m and to produce marketplace revenue of $1.25bn a year.
“So we’ve got a lot of work to do in a lot of areas, but I think that continues to be the positive for us,” he said. “We can see all of the opportunities – our job is to go after them.”