The board of directors of Hypebeast Limited (HKG:150) has announced the Group’s unaudited key financial results for the three months ended 30 June 2021 (FY2022 Q1).
FY2022 Q1 ended on a high note as the business achieved record results for first-quarter revenue, gross profit and gross profit margin as various regions exit lockdown from the COVID-19 pandemic. Revenues for FY2022 Q1 increased 57.9% year-on-year to approximately HK$200.8 million, due to increases in Media contract values, continued expansion in client industry categories and strong regional revenue growth from the Group’s Media segment. Revenues for FY2022 Q1 increased by 12.6% compared to the three months ended 30 June 2019 (FY2020 Q1), reflecting significant growth versus the pre-COVID-19 baseline. Such growth versus pre-COVID-19 pandemic business levels are expected to continue and accelerate throughout FY2022.
The Group experienced specific strength in the rebound of the Media business, with a significant increase in signed contract value of approximately 111.9% in FY2022 Q1 versus prior year or 74.7% versus pre-COVID-19 pandemic level in the FY2020 Q1, primarily driven by increased production capabilities and expansion across brand client categories. The COVID-19 pandemic accelerated digital transformation strategies for global brands resulting in a greater shift in marketing & advertising budgets from traditional marketing channels to digital online channels. The Group expects to benefit from this trend to continue for the foreseeable future.
“We are delighted to deliver yet another record-breaking quarter as we continue our strong rebound from COVID-19, and we have our eyes set on even higher targets for the rest of this year and next year,” said Kevin Ma, Founder and CEO of Hypebeast Ltd. “Alongside an overall surge in business activity in both our Media, and E-commerce and Retail businesses, we look forward to bringing exciting projects to life over the next 12 months – such as the much-anticipated opening of the flagship store in New York City in early 2022. We are working hard to expand our platform and our presence and look to sustain the momentum in the next quarters and beyond.”
— Our media business in the US and China continued its strong rebound, accelerating away from the effects of the COVID-19 pandemic with year-on-year increases of 139.6% and 48.2% respectively for FY2022 Q1;
— Gross profit for FY2022 Q1 surged 131.1% year-on-year or 34.2% compared to FY2020 Q1, amounting to approximately HK$117.1 million, while gross profit margin improved to approximately 58.3%, representing a year-on-year increase of 18.5 percentage points.
— The Media segment recorded a year-on-year increase in revenue of 117.1% to HK$145.4 million in FY2022 Q1, surpassing the pre-COVID-19 pandemic levels of HK$112.9 million recorded in FY2020 Q1;
— Due to increases in revenue and more cost-efficient campaign production, overall gross profit margin for the Media segment increased by 20.7 percentage points versus prior year, or 10.4 percentage points versus FY2020 Q1, to 62.5% for FY2022 Q1.
E-commerce and Retail Segment:
— Gross profit from the E-commerce and Retail segment increased by 16.2% to approximately HK$26.3 million for FY2022 Q1, despite a decline in revenue of approximately 8.0% to HK$55.4 million for FY2022 Q1 as inventory intake levels rebound from management effected COVID-19 pandemic purchase reductions;
— The Group improved its profitability with higher margin gains. Gross profit margin reached 47.4% for FY2022 Q1, up 9.8 percentage points as compared to three months ended 30 June 2020 (“FY2021 Q1”), largely driven by higher sell through rate and higher proportion of products being sold at full price. Both these indicators reflect a healthier portfolio of inventories on hand compared to pre-COVID-19 pandemic related adjustments to intake as implemented by management.
— Selling and marketing expenses increased by approximately 25.9% from approximately HK$27.0 million for FY2021 Q1 to approximately HK$34.0 million for FY2022 Q1, largely driven by (i) increase in headcounts upon strong recovery and growth of the media and e-commerce and retail segments; and (ii) increase in variable commission paid as a result of the significant increase in signed contract value as discussed above. As a percentage of revenues, selling and marketing expenses decreased from approximately 21.3% for FY2021 Q1 to approximately 16.9% for FY2022 Q1.
— Administrative and operating expenses were approximately HK$45.5 million for FY2022 Q1, up by approximately 65.5% from approximately HK$27.5 million for FY2021 Q1 as the Group exercised prudent cost management and received government subsidies during FY2021 Q1. Administrative and operating expenses as a percentage of revenue slightly increased from approximately 21.6% for FY2021 Q1 to approximately 22.7% for FY2022 Q1.
For further details on the quarterly results performance, visit the Group’s corporate website to view the full results announcement.
About Hypebeast Limited (HKG:150)
Hypebeast Ltd. started from a sneaker website founded by Kevin Ma in 2005 to a publicly listed media company in 2016. With a total reach of over 44.6M users across all platforms, The media group boasts a global readership across Asia Pacific, North America, Europe and more, with the flagship platform available in five languages. The group has expanded its publishing brands to a wider scope in recent years, encompassing Hypebeast and its multiple content distribution platforms, HBX, our e-commerce and retail platform, and Hypemaker, our global agency.