Eve Sleep slashes losses but warns over falling sales
Eve Sleep slashed its losses by 50% in the first half of the year but has warned investors it expects to miss annual sales targets.
The direct-to-consumer mattress firm warned on revenues as it moves forward with a turnaround plan which saw its founder and chief executive officer ousted last year.
Eve admitted making “missteps” last year after losses deepened on the back of a failed strategy to expand into Europe.
It reported a 50% decrease in losses to £5.9 million for the half-year to June 30 after it focused on its core markets in the UK, Ireland and France.
However, group underlying revenue fell by 8% to £12.9 million during the six-month period as it reported a 29% sales slump in France.
In the UK and Ireland, sales fell marginally, down 0.9%, due to the “challenging retail backdrop” and promotional nature of the mattress market.
The downturn comes amid growing pressure in the market, with rival firm Simba reporting a challenging performance earlier this year.
Eve said it expects sales to tick up in the second half of the year on the back of a major advertising campaign and new partnerships with Argos, Dunelm and Homebase.
James Sturrock, who joined as chief executive in September 2018, said he was pleased with financial progress in the first half, despite “substantial retail headwinds” and the competitive nature of the category.
He added: “We have a strong new team in place, and there are early signs that the rebuild strategy is driving meaningful improvements in our key metrics in both the UK and Ireland, and France.
“Our focus on reducing losses, whilst creating a differentiated proposition as a sleep wellness brand, will underpin the business and lay the path to long-term profitability.
“We have some exciting plans and partnerships launching and I look forward to seeing more progress against our strategy in some of the biggest peak trading periods for the business in the second half of the year.”
Shares in the company fell 4.8% to 8.37p in early trading, despite an initial rise when the stock market opened.