Gear4music, the London-listed online retailer of musical instruments and equipment, has announced a decline in first-half revenue as the company focuses on prioritizing gross margins over sales growth. The dip in revenue can be attributed to lower customer demand from overseas and Europe. However, the company experienced a modest increase of 3% in revenue from its U.K. segment.
Lower Consumer Demand Affects International Segments
The revenue for the six months ending on September 30th was recorded at £62.6 million ($76 million), compared to £66.3 million from the same period the previous year. The decrease in revenue primarily stems from a 15% decline in customer demand from Europe and other international markets.
Promising Outlook for Full-Year Performance
Gear4music's gross margin for this period is expected to be approximately 27.1%, marking an increase of 80 basis points compared to the previous year. The company's management has provided market expectations for the full-year forecast, with anticipated revenue of £161.7 million, earnings before interest, taxes, depreciation, and amortization projected at £9.8 million, and a pre-tax profit forecasted at £1.2 million.
Strategic Investments for Future Growth
CEO Andrew Wass stated that Gear4music will continue to invest in growth projects, such as their second-hand system, while leveraging AI-driven technologies and streamlining operations to reduce costs. These actions will position the company favorably for further expansion once economic conditions improve.
Shares of Gear4music experienced a decline of 5.6% at 127.50 pence as of 0718 GMT.