Westwing Group Anticipates Mixed Outlook for FY24 Despite Solid Q4 Results

Westwing Group has shared its final Q4 outcomes, aligning with preliminary results, but reveals a mixed forecast for FY24. The company anticipates its sales to fluctuate between a decrease of 3% and an increase of 4% year-over-year in FY24, projecting a mid-point sales growth of 0.5% to €415-445 million. This forecast considers the strategic product offering adjustments in Spain and Italy and the persisting challenges in the home & living market, particularly for high-value items like furniture.

However, Westwing reports encouraging signs with a 6% year-over-year growth in Gross Merchandise Value (GMV) in Q1'24, indicating improvements in active customer numbers and basket size. The company also plans to expand into the Portuguese market in 2024, with additional regional expansions anticipated in 2025, expected to leverage its central logistics for scalability.

Despite these growth initiatives, Westwing projects its adjusted EBITDA to be between €14 million and €24 million, with a margin of 3.1% to 5.8%. The expected financial performance reflects a favorable product mix and cost-saving measures in logistics and general and administrative expenses. Nevertheless, investments in transitioning to a SaaS-based tech platform and restructuring efforts in Spain and Italy could negatively impact earnings and free cash flow in the short term.

Conclusively, while 2024 poses challenges, Westwing remains optimistic about its long-term potential, supported by the structural shift towards e-commerce and its unique positioning in the European Home & Living market.