Step One Clothing, the online direct-to-consumer underwear retailer, has released a trading update projecting modest revenue growth for the 2025 financial year, however it expects earnings to decline amid weaker consumer spending.

The company forecast revenue of $86.9 million for FY25, a 3 per cent increase from $84.5 million in FY24. However, earnings before interest, taxes, depreciation, and amortisation (EBITDA) are expected to fall 4 per cent, to $17.4 million, down from $18.1 million the previous year. 

Net profit after tax is projected to rise slightly, by 1 per cent, to $12.6 million, compared with $12.4 million in FY24.

Founder and CEO Greg Taylor described the fiscal year as “challenging”, citing subdued consumer confidence and ongoing cost-of-living pressures that have weighed on discretionary spending.

“Customer purchasing behaviour has become increasingly reliant on sale events and promotions, which has impacted overall trading momentum and led us to adopt a cautious approach to marketing investment,” said Taylor. 

Despite the headwinds, Taylor noted that Step One’s strong product quality and loyal customer base have helped the company maintain its market position.