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Gear4Music PLC on Thursday said UK sales remained flat in the three months that ended December 31, as its global operations see growth.
The York, England-based online music instruments and equipment retailer said revenue for its financial third quarter was £49.5 million, up 4.9% from £47.2 million a year prior.
UK revenue was £26.0 million, unchanged from a year ago, while Europe and rest of the world revenue was £23.5 million, up 11% from £21.2 million.
Gear4Music said the increase in European sales was down to infrastructure investment in financial 2022, to improve customer proposition, while UK revenue were hurt by weak consumer sentiment and Royal Mail strikes in December.
Gross profit was £12.7 million in the third quarter, down 6% from the third quarter of financial 2021, but 20% above that of financial 2020.
Gear4Music reported gross margin of 25.6% in the third quarter, narrowed from 28.4% a year ago, ‘reflecting targeted stock reductions of slower moving product lines’.
Chief Executive Officer Andrew Wass said: ‘A continuing targeted reduction of both on-hand inventory and net debt, combined with a period of weaker consumer sentiment and lower own-brand sales led to subdued gross margins, although tight control over marketing and labour costs largely compensated for this and we expect margins to recover during [financial 2024].
‘As we continue to make good progress with new growth orientated projects, we remain confident in our long-term profitable growth strategy, and that the group is appropriately resourced and well placed to make the most of opportunities as they arise.’
Gear4Music shares were down 20% trading at 111.00 pence per share at midday on Thursday in London.
By Harvey Dorset, Alliance News reporter
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