Eve Sleep sees 13% revenues rise as online sales remain strong 

In a trading update for the six months ended 30 June 2021, Eve Sleep (EVE FOLLOW) said it has seen “a good first half” with group revenue increasing by 13% to £13.9m from £12.2m in 2020. 

The direct to consumer sleep wellness brand said that compared with pre pandemic revenues in 1H19, UK and Ireland sales were 15% higher, largely due to online growth.  

Eve said demand was ‘particularly strong’ for its hybrid mattress range and premium bed frames, with accessories such as the morphee sleep aid and the weighted blanket, and add-ons such as the temperature balancing protector driving materially higher basket values.  

In the UK, marketing investment was front half weighted, rising to 29% of revenue (1H20: 27%) as a result of increased TV advertising. Eve said this sets up a strong brand position for 2H21 trading. Meanwhile, the Company said investment in French marketing, which was also first half weighted, was around £1m in the period to reflect upfront development costs. 

In France, the majority of 1H21 was spent preparing for the launch of the new marketing campaign - 'La vie en jaune', which began in May. Ahead of the campaign, marketing spend was minimal, resulting in revenues for the period marginally lower year-on-year at £2.2m.  

The Company said financial payback on this investment is expected in the second half of the year and over 2022. It added that early indications from June 2021 suggest that the marketing campaign has been well received, with a strong increase in online traffic. 

Commenting on this morning’s results, Cheryl Calverley, Chief Executive of eve Sleep said, "First half revenue growth of 13% is a pleasing result, and in line with our expectations. Our UK business is up 15% on pre pandemic revenue levels reported in H1 of 2019.” 

She added, “The balance across sales channels has shifted somewhat, but the overall business is in good health. The start of our investment programme in France has been very encouraging, and we look forward to seeing this campaign power our business performance over the next two years, replicating the progress we have seen in the UK.” 

While shares have risen by over 13% over the past month, the stock was trading 14.13% lower during late morning trading at 3.95p after warning investors of further disruption.  

EVE price chart

Commenting on outlook, Eve said, ‘‘Whilst visibility on UK trading conditions for the second half of the year remains limited, the economic recovery looks to be gaining momentum, underpinned by ongoing strength in consumer spending, including on the home.’ 

Eve said current consumer behaviour reflects the continued momentum for online shopping and that several positive demand factors bode well for both the retail sector and its brand. 

However, eve also warned investors that the future path of the ongoing pandemic is unclear and that the risk of further shocks and disruption to the economic recovery remains. 

As previously set-out in the Company’s final results on 18 March 2021, the Group has seen some industry supply challenges around raw material inflation and componentry shortages. 

Nevertheless, Eve’s Board anticipates that second half revenues, which are to be published in September 2021, are forecast to be in line with expectations and minimal cash outflows. 

Calverley, who stated that Eve has entered 2H21 “with confidence,” added: “Maintaining excellent customer service in the face of fluctuating demand and supply chain challenges has been a core focus for us, and the decisions we have taken to improve the resilience of our business through increasing our stock holding and investing in our operational and people capability have undoubtedly underpinned the good H1 performance.” 

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