Direct-to-consumer underwear brand Step One Clothing has delivered a modest revenue increase and stronger profitability for FY2025, navigating subdued domestic demand while laying the foundations for international expansion.

For the 12 months to June 30, Step One reported revenue of $86.9 million, up 2.8 per cent year-on-year. Net profit after tax (NPAT) rose 2 per cent to $12.7 million, reflecting disciplined cost management and a strategic shift in focus.

Australian revenue dipped 1.1 per cent to $63.3 million, impacted by reduced consumer spending and a pullback in local advertising. Founder and CEO Greg Taylor cited a “challenging retail environment,” driven by cost-of-living pressures and cautious consumer behaviour.

“In response to these challenging conditions, we made the decision to reduce marketing investment in the Australian market, ensuring a disciplined focus on profitability during a demanding period for the industry,” Taylor said. 

The company’s UK business emerged as a key growth driver, with sales up 8.7 per cent to $29.5 million, now accounting for more than a quarter of total group revenue.

“The UK was a key area of focus for us in the second half,” Taylore noted. “We trialled a refreshed marketing approach informed by local insights and customer feedback, which resonated strongly and reinforced our brand positioning.” 

He also highlighted promising results from test campaigns on TikTok Shop in the UK, describing it as a cost-effective, scalable channel.

Step One is also eyeing the US market cautiously, viewing it as a long-term growth opportunity but avoiding heavy upfront investment.

Looking ahead, the company remains committed to its profitable growth strategy, anchored by four pillars: expanding the product range, acquiring new customers through targeted marketing and partnerships, pursuing profitability across markets, and testing scalable new channels.