Eve Sleep (EVE)

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Eve Sleep EVE Logo

The direct to consumer European sleep brand.

29-Nov-2017 – 89p – £123.4m – PER n/a

Trading Update – Headlines with “Strong sales, acceleration of investment, on track for UK profitability in Q4 2018” – Group on track to make a profit in 2019. Marketing costs reducing significantly, seemingly targeting 35% from 64% in H1 2017.

Can’t see the fascination here – It’s a mattress, something we replace every 10 years or so, perhaps. I may be wrong and soon everyone will be using an Eve Sleep mattress. On the other hand the company may continue spending a fortune on advertising and end up dead in the water. It’s just not for me, I sleep well enough at night as it is, don’t need to potentially disrupt this (with the mattress or the holding)!

12-Mar-2018 – 128p – £177.5m – PER n/a

Results For The 12 Months To End December 2017 – “2017 sales up 132%, targeting UK profitability in Q4 2018”. Gross profit margin is up (an impressive) 910 bps to 57.7%. Loss Before Tax is up a whopping 67% to -£19.0m. Trading for the current year has started strongly with sales for the first six weeks 94% above the same period last year. Group profitability targeting end of 2019.

A loss maker but seems to be ads everywhere I look (hence the huge loss I guess), so with a little spare time, decided to have a look. I checked my notes and I think I still have a similar view here. Just can’t see the fascination – It’s a mattress, something we replace every 10 years or so. I may be wrong and soon everyone will be using an Eve Sleep mattress. On the other hand the company may continue spending a fortune on advertising and end up dead in the water. It’s just not for me, I sleep well enough at night as it is, don’t need to potentially disrupt this (with the mattress or the holding)!

2-Jul-2018 – 69p – £96.1m – PER n/a

Trading Update For The 6 Months To End June 2018 – A timely update that’s for sure, sales are up 61% but below expectations. Will change focus to core growth markets (countries) rather than new countries. UK profitability delayed. Not expected to recover from H1 in H2 – A profit (sorry, greater loss than forecast) warning it seems! And the CEO has been put to bed (sorry!).

As I mentioned previously this is a loss maker (which I don’t usually invest in) but with ads everywhere I decided to cover (to see how the story unfolds). I think my previous comment still applies – I just can’t see the fascination – It’s a mattress, something we replace every 10 years or so. I may be wrong and soon everyone will be using an Eve Sleep mattress. On the other hand the company may continue spending a fortune on advertising and end up dead in the water. It’s just not for me, I sleep well enough at night as it is, don’t need to potentially disrupt this (with the mattress or the holding)! – This is now going on my Avoid list and I will cease coverage for the time being.

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