Booktopia is not pleased with its full-year financial outcome for 2023, as it made a loss of $29 million. Its revenue declined from $240.8 million in 2022 to $197.6 million this year. Australian customers’ average online book order value increased by nearly 5%. It doesn’t help that the average customer spent 0.6% less this year.
“The results for the year have fallen short. It should also be noted that this is the first full financial year since lockdowns were enforced when the company was well positioned to capitalize on the consumer demand as such,” said CEO David Nenke, at an investor briefing this afternoon.
What went wrong?
This year was certainly the first during which companies could see what the new normal looks like.
“The results for the financial year 2023 were not what we wanted. Against the backdrop of consumers returning to pre-COVID shopping behaviors, particularly noting the rise in customers returning to shop at physical stores and the economic climate that has led to cost of living pressures for consumers,” said Nenke.
This doesn’t seem to be unique to Booktopia. It has been a year of transition for most online shopping platforms in Australia and the online retail industry at large. “Despite the challenges, we have continued to channel our focus on the customer, considering their experience with us and how we create a journey that delivers to or beyond their expectations,” said Nenke.
A clear strategy going forward
“We have a clear strategy and a unique set of advantages that enable us to deliver on our mission of providing Australians with the best book-buying experience,” assured Nenke.
The group implemented a number of cost rationalization and margin optimization measures earlier this year, to help manage the economic headwinds with a reset of its cash space. It has now fully transitioned into a new customer fulfillment center, which it’s hoping will show results next year.
“These initiatives help improve the gross profit unit economics from $7.65 in FY 22 to $7.85 in FY 23. We have forecast these initiatives will contribute to an improvement in earnings in FY 24 by at least $12 million,” said Nenke.