• Revenue of $36.3 million, down 24.5% from 1H25
• EBITDA loss of $10.0 million, reflecting a $10.9 million inventory obsolescence provision
• Net loss after tax of $8.5 million

Step One Clothing Limited (ASX:STP), a leading online direct-to-consumer underwear brand, has announced its financial results for the six months ending 31 December 2025 (1H26). The company reported revenue of $36.3 million, down 24.5% from $48.1 million in 1H25. EBITDA was a loss of $10.0 million, compared to a profit of $11.2 million in the prior year period, reflecting a $10.9 million inventory obsolescence provision. Adjusted EBITDA, excluding the inventory provision, was $1.0 million. Net loss after tax was $8.5 million, compared to a profit of $8.2 million in 1H25. The company maintained a strong financial position with cash and financial assets of $24.0 million and no debt. Step One Founder and CEO, Greg Taylor, stated that sales in late 2025 were below expectations due to slower-than-expected clearance of legacy inventory despite promotional activity, leading to the inventory provision. The company is now focused on its reset program, which includes moderating discount depth, focusing on value-led product innovation, and restoring brand quality perception. Customer retention remains solid at 65%, positioning Step One to capture new opportunities as it broadens its product range, invests in brand awareness, and works to make its offer more accessible to new customers.

Given the transition phase of the business, Step One is not providing full-year earnings guidance at this stage.