Step One Clothing (ASX:STP) has reported a challenging first half for the 2026 fiscal year, characterised by a significant revenue dip and a pivot toward "resetting" its brand value.
The online direct-to-consumer underwear retailer announced that revenue fell to $36.3 million for the six months ended Dec. 31, 2025, a 24.5% decrease compared to the $48.1 million recorded in the prior corresponding period.
The company’s bottom line was hit hardest by a massive $10.9 million inventory obsolescence provision, leading to a statutory EBITDA loss of $10 million and a net loss after tax of $8.5 million.
This stands in stark contrast to the $8.2 million profit reported this time last year
However, stripping away the inventory provision, the "adjusted EBITDA" remained narrowly in the black at $1 million, though this still represents a 91.3% decline from H1 FY25.
Founder and CEO Greg Taylor attributed the result to slower-than-expected clearance of legacy stock, necessitating the aggressive write-down.
Despite the earnings hit, Step One maintains a debt-free balance sheet with $24 million in cash.
Citing the current "transition phase," the company has declined to provide full-year earnings guidance.
At the time of reporting, Step One Clothing's share price was $0.295.