Signa Sports United N.V. reported that the operating environment in the first quarter of fiscal 2023 was a continuation of the prior quarter, with depressed consumer sentiment and a promotional overstocked market, in particular in the bike category. In these market conditions, the acquisitions which closed in the first quarter of fiscal 2022 enabled SSU to deliver double-digit net revenue and customer base year-over-year (YoY) growth, on a reported basis. Against this backdrop, the company said it focused on clearing excess inventory, which significantly affected gross margin in the period.

Fiscal first quarter revenues increased 27.0 percent to €194 million in the 13-week period ended December 31, 2022, compared to €194 million in the prior-year comparable quarter. Gross margins declined 698 basis points to 29.6 percent of sales, “reflecting increased markdowns required to reach target inventory levels, especially in overstocked categories at the lower end of the bike market.”

Stephan Zoll, CEO of SSU, said, “The unexpected consumer sentiment deterioration and inflationary pressures due to the conflict in Ukraine, continued to significantly impact our operations and margins in the first quarter of fiscal 2023, particularly in the bike business and in international geographies. As announced with our annual results, we are refocusing our commercial approach on our core markets and continue to assess strategic realignment opportunities. We remain confident those initiatives will make us a more agile and resilient market leader and enable consolidation opportunities arising from the current market environment.”

Alex Johnstone, the company’s CFO, said, “The challenging market conditions from the second half of FY22 have continued to deteriorate in the seasonally slower winter months, as expected. We anticipate the competitive environment to persist until the high inventory levels, in particular in the bike market, have cleared, and inflationary pressures ease. We are making good progress against our cost and inventory targets, and remain confident that after this transitory period, the Company will return to profitable growth against a more rational market backdrop”.

Key Performance Indicators 

  • Posted 26 percent YoY growth and 165 percent growth verus pre-Covid (Q1 Fiscal 2019) to 6.3 million active customers, led by recent acquisitions and focused marketing spend to drive conversion;
  • Increase in visits with 13 percent YoY traffic growth in Q1 Fiscal 2023 on a reported basis, thanks to acquisitions closed in Fiscal 2022. Decline 23 percent in pro forma organic traffic due to worsening consumer sentiment, remaining supply constraints and lapping COVID-19-driven spikes;
  • Thirty percent reported YoY increase to 2.0 million net orders in Q1 Fiscal 2023, thanks to acquisitions closed in Fiscal 2022. Net order YoY declined on a pro forma basis of 14 percent driven by the traffic decrease, in the challenging operating environment;
  • Net AOV increased by 8 percent YoY to €103.7 in Q1 Fiscal 2023 on a reported basis and by 3 percent on a pro forma basis, due to better bike availability on the back of easing supply chain constraints on lower and mid-end range; and
  • Pro forma growth vs. pre-Covid (Q1 FY19) of active customers (+26 percent), conversion (+111 bps), net orders (+7 percent) and AOV (+7 percent)

The challenging operating environment continues to weigh on SSU’s performance and is expected to do so through Fiscal 2023, as inflationary pressures are forecasted to weigh on consumer sentiment and discretionary spending. The company is confident its previously announced changes in commercial approach and focus on its core markets will lead to a targeted return to profitability (on a run rate basis) in FY24, and reiterated the short-term impacts on its financial performance:

  • Changes in the commercial model result in lower sales, albeit at a higher contribution;
  • Gross margin YoY contraction expected through H1 Fiscal 2023, gross margins to start recovering from H2 Fiscal 2023;
  • Focus on lean operating processes to result in accelerating cost benefits from FY24; on track with various cost reduction measures;
  • Transaction synergies to start accruing from Fiscal 2024 along with IT re-platforming, logistics consolidation and procurement benefits;
  • Focused inventory reduction to release over €30-40 million of capital in Fiscal 2023; and
  • CAPEX expected at €35-40 million level in Fiscal 2023.

As previously disclosed, the company is undergoing a strategic realignment assessment to generate long-term shareholder value and expects to disclose the outcome of the review with its Q2 and H1 FY23 financial results.

Signa Sports United is a NYSE-listed specialist sports e-commerce company with headquarters in Berlin. It has businesses operating in bike, tennis, outdoor, and team sports. SSU has more than 80 online sites and partners with 500 shops serving over six million customers worldwide. It includes Tennis-Point, WiggleCRC,, Bikester, Probikeshop, Campz, Addnature, TennisPro, and Outfitter.