Gymshark posts dip in profit in spite of rising sales

Sportswear retailer Gymshark has outlined its financials for the year to July 2022, with the group reporting a clear dip in profits largely impacted by “the general economic environment”.

The Solihull-based company reported that its pre-tax profits fell 39 percent to 27.8 million pounds, dropping from 45.4 million pounds the previous year. This came despite its revenues seeing a significant uptick of 21 percent to 484 million pounds, rising from 401.9 million pounds.

While its gross profit increased to 315.1 million pounds, up from 282.2 million pounds, its operating profit fell from 46.5 million to 29.5 million pounds. Its net profit for the year came in at 22.5 million pounds, down from 36.4 million pounds in the year prior.

In the filing, with the UK’s Companies House, the firm said that its financials had partially been affected by its investment into US-based facilities, including its distribution centre.

Pandemic aftershocks continue to hit home

This was further evident in its note on the rising costs surrounding supply chain operations, where everything from logistics to raw materials had seen price rises in the past year.

In the US, Gymshark has been implementing some notable changes, namely that of investing in its team in the region, where it highlights that despite market challenges it still managed to increase sales alongside its international business.

In the filing, the company stated that all countries where it traded had been affected by the pandemic and the relaxing of societal restrictions, ultimately impacting consumers and businesses alike.

It continued: “The consumer has had more opportunities to apply discretionary spend to entertainment and travel, but inflation and rising costs are also affecting spending.

“Despite these pressures, the company has continued to grow its like-for-like external sales. The company remains profitable, though margins have been affected by the general economic environment.”