Eve Sleep shrugs off widening losses, saying profitability still on horizon
Eve’s chief executive said it was still on track to swing to a profit within the next two years.
Online mattress retailer Eve Sleep has shrugged off widening losses amid a 132% surge in sales as its chief executive confirmed plans to post a profit by the end of 2019.
The company saw its statutory pre-tax loss grow from £11.3 million in 2016 to £19 million over the year to December 31, knocked by heavy investments in marketing and £2.1 million in one-off costs associated with its initial public offering (IPO) last May.
But sales more than doubled to £27.7 million over the period from £12 million a year earlier, with revenue growth in the UK and Ireland rising 109% to £16.1 million and international sales up 174%.
Eve Sleep said it “achieved what it set out to do in 2017” by focusing on rapid sales growth and “increasing cost efficiency”, while continuing to expand its product offerings beyond mattresses – including pillows, sheets and duvets – which now account for 13% of sales.
Chief executive Jas Bagniewski confirmed the company was still on track to swing to a profit within the next two years.
“We are building a sizeable business across Europe that we believe will continue to win market share from traditional operators as the £26 billion sleep market continues to transition online.
“Our results to date demonstrate that we have a winnable customer proposition in both the UK and Continental Europe and have a management team that can execute.
“We are still targeting to achieve UK profitability at the end of 2018 and group profitability by the end of 2019.”
That is “notwithstanding the difficult consumer market in the UK”, where shoppers have reined in spending amid high inflation and stagnant wage growth.
Eve Sleep said trading for the current year had started “strongly” with sales over the first six weeks already 94% higher than a year earlier.
It has also struck a new retail deal with French home goods chain BUT.
Eve now operates in 15 countries, including the UK and Germany where 145 physical stores now offer Eve products – up from just one at the start of 2017.