• 1H26 revenue expected to decline 31% to 37% vs 1H25
• 1H26 EBITDA expected to be a loss of $9 million to $11 million
• $10 million provision for inventory obsolescence

Step One Clothing Limited (ASX:STP), a leading online, direct-to-consumer innerwear brand, has provided a trading update for the first half of FY26 (1H26). Based on year-to-date trading, including estimates for December, the company expects its 1H26 financial results to fall within the following ranges: 1H26 revenue is expected to be between $30 million and $33 million, which represents a decline of between 31% to 37% on the prior corresponding period (1H25: $48.1 million); and 1H26 EBITDA is expected to be a loss of between $9 million and $11 million (1H25: $11.3 million profit). The recent sales results were materially below expectations, and the company's efforts to clear older and slower-moving inventory were not successful. As a result, the company has raised a $10 million obsolescence provision against this legacy stock. This inventory is now fully provisioned, and no further material provisions are anticipated at this stage. The combined impact of softer sales and this one-off inventory provision has led the company to reassess its full-year outlook, and the FY26 EBITDA guidance previously provided has been withdrawn. The company will update the market once greater visibility over trading and inventory outcomes is available.