The Step One Clothing Ltd (ASX: STP) share price has dropped dramatically this morning following a trading update on a potential GST overclaim.
The Step One share price opened at $1.53 today, a plunge of 34% since yesterday's close. At the time of writing, shares in the online retailer are still down 29.5%, trading at $1.66.
Step One prides itself on becoming the manufacturer of the most comfortable men's underwear on the planet while leaving a positive ethical footprint. Let's take a closer look at the company's news today.
Potential GST overclaim
In its release, the company reported a potential overclaim of GST credits on an Australian supply made by a foreign corporation.
Step One reported that its potential overclaim was limited to just one supplier, and estimated the financial impact for FY22 would be $1.6 million ($1.1 million after tax). The flow-on impact from the overclaim for FY21 would be about $1.3 million ($0.9 million after tax), with FY20 and previous years coming in at $200,000 ($100,000 after tax).
The company said it had reviewed all other foreign suppliers and was in the process of notifying the Australian Taxation Office (ATO).
The company was listed on the ASX just last month, so today's plunge in the Step One Clothing share price will no doubt come as a blow to shareholders.
The company said it would conduct a full review of its GST in the coming year, and expects its FY22 earnings before interest, taxes, depreciation and amortisation (EBITDA) to be $15 million, as per its prospectus.
With growth on the intended horizon, the company expects its FY22 sales revenue to be up by 21-25% (compared to 19.9%) with the introduction of its women's innerwear line due next month.
The company will deliver a results announcement on its sales and financial performance for the six months ending 31 December 2021 on 22 February 2022.
How has the Step One share price performed?
The Step One Clothing share price has fallen by almost 40% in just a few weeks since its initial public offering on 4 November.
The Step One share price soared 10% yesterday, despite no news or announcement being released. However, that boost was short-lived after today's downward spiral.
The company has a market capitalisation of $307 million and more than 185 million shares issued.
