Eve Sleep improves margins for 2019

Eve Sleep PLC has published its full-year financial results for the year ending 31 December 2019, displaying a significant increase in its gross margin figures. The UK based direct-to-consumer wellness brand has put this success down to its rebuild strategy, which focuses on reducing losses and profitable sales.

Eve’s recent approach has revolved around a planned revenue reduction, instead focusing on improved profitability. Despite an 18% reduction in revenue and 19% drop in gross profit, compared to 2018, gross profit margin increased by 70 bps in 2019, achieved primarily by reducing losses: underlying EBITA loss was lowered by 44% to £10.7 million, while operating cash burn was cut by 55%.

In addition, £11.7 million net of expenses in new equity and £0.9 million in advertising credits were raised from Channel Four in February 2019.

There were also improvements in the company’s operational KPIs, which included repeat customer frequency increasing 16.7% in the UK and by 17% in France, an increase in non-mattress sales, and lower returns rate.

James Sturrock, CEO of Eve Sleep, commented: “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. Improved financial and operational KPIs demonstrate increased customer loyalty across our expanding product suite.”

The economic impact of Covid-19 is presenting a major challenge to the non-essential retail sector, and Eve acknowledged it is expecting subdued demand for a period. However, the retailer remains confident of continuing its strong performance throughout 2020. Sturrock added: “While there remains considerable wider market uncertainty over the rest of the financial year, we have a healthy net cash position of £7.8 million as at 29 February 2020, no debt and a rebuild strategy that is delivering.”

What’s Hot on Essential Retail?