Westwing Group (WEW) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue declined by 1.1% year-over-year to EUR 107.5m, mainly due to product assortment shifts and subdued consumer sentiment, but adjusted EBITDA rose to EUR 9.1m at an 8.5% margin, up 3 percentage points year-over-year, reflecting significant profitability gains.

• Free cash flow was negative at EUR -8.9m, mainly due to seasonal inventory build-up, with net cash position at EUR 56.9m at quarter-end.

• The three-step value creation plan's first two phases are complete, with the third phase focusing on product assortment, market share growth, brand positioning, and geographic expansion; continued execution includes successful country and store expansion.

• FY 2025 guidance is confirmed: revenue EUR 425–455m (-4% to +2% yoy), adjusted EBITDA EUR 25–35m (6–8% margin), with significant growth anticipated in 2026 driven by expansion and normalization of assortment effects.

Financial highlights

• Adjusted EBITDA improved from minus EUR 2m in Q1 2022 to plus EUR 9.1m in Q1 2025, with margin rising from minus 1.5% to 8.5%.

• Gross margin increased to 51.5% in Q1 2025 (+0.2pp yoy); contribution margin rose to 32.2%.

• Net result turned positive at EUR 2.5m in Q1 2025.

• CapEx was EUR 2m (2% of revenue), with a year-over-year decrease due to reduced investment in internally developed software.

• Net cash position at end of March was EUR 56.9m, down from end of 2024, mainly due to inventory increases and restructuring expenses.

Outlook and guidance

• Q1 performance aligns with 2025 guidance for revenue and profitability, with full-year revenue expected between EUR 425m and EUR 455m and adjusted EBITDA between EUR 25m and EUR 35m.

• Negative effects from product assortment changes expected to bottom out by end of 2025; significant growth anticipated in 2026 driven by expansion and normalization of assortment effects.

• Profitability expected to benefit from scale effects and improved product mix as expansion continues.