Redbubble (ASX:RBL) share price on watch after delivering stellar Q1 growth

The Redbubble Ltd (ASX:RBL) share price will be on watch on Thursday after delivering explosive growth during the first quarter…

| More on:

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Redbubble Ltd (ASX: RBL) share price will be one to watch on Thursday following the release of its first quarter update.

How did Redbubble perform in the first quarter?

Redbubble has started FY 2021 in a very positive fashion, with further strong growth being delivered across the business.

For the three months ended 30 September, Redbubble reported Marketplace Revenue of $147.5 million, up 116% (122% on a constant currency basis) on the prior corresponding period.

Things were even better for its gross profit, which increased 149% (157% in constant currency) to $64.5 million for the quarter.

This ultimately led to Redbubble delivering first quarter earnings before interest and tax (EBIT) of $22.1 million, compared to a loss before interest and tax of $1.5 million a year earlier.

What were the drivers of its growth?

Management advised that the company saw a continuation of strong demand across products and geographies during the quarter.

This was particularly the case in its largest market – North America. First quarter sales in the region more than doubled during the quarter. This is a big positive given that the North American market accounts for 71% of its gross transaction value.

Sales were also very strong in the ANZ and UK markets, growing 124% and 122% over the prior corresponding period.

In respect to products, the accessories category was the star of the show. It reported a 562% increase in accessories sales during the first quarter. This appears to have been driven partly by increasing demand for fashionable face masks. Accessories now account for 27% of sales on its marketplace.

What's next?

The company advised that it is continuing to monitor online sales trends and remains mindful of external uncertainties that lie ahead.

It intends to focus on four key initiatives to generate ongoing profitable growth:

1) Artist acquisition, activation and retention; 2) User acquisition and transaction optimisation, 3) Customer understanding, loyalty and brand building; 4) Further physical product and fulfilment network expansion.

Redbubble CEO, Martin Hosking, commented: "The strategic priority for the group now is to ensure we extend the market leadership we have established. We intend to invest in the customer experience to improve loyalty and retention and ensure long-term higher levels of growth. The company has the resources to undertake the anticipated investments and the margin structure to ensure it can do so while remaining profitable."

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Contented looking man leans back in his chair at his desk and smiles.
Share Market News

5 things to watch on the ASX 200 on Thursday

Here's what to expect on the local market today.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Broker Notes

These ASX 200 shares can rise 20% to 50%

Let's see which shares are being tipped to rocket from current levels.

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors panicked when the latest inflation figures came out today.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Broker Notes

Why Guzman Y Gomez shares are a sell

Goldman Sachs has given its verdict on the burrito seller.

Read more »

A man pulls a shocked expression with mouth wide open as he holds up his laptop.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why Mac Copper, Pro Medicus, Web Travel, and Yancoal shares are pushing higher today

These shares are having a good time on hump day. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why ALS, Fisher & Paykel Healthcare, IPD, and Predictive Discovery shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

Man looking at his grocery receipt, symbolising inflation.
Share Market News

How are ASX 200 investors responding to the latest Aussie inflation numbers?

The ASX 200 was up 0.2% today before the ABS reported the latest inflation figures.

Read more »