The ASX dividend share Step One Clothing Ltd (ASX: STP) has seen its share price rocket to the stars over the past year. Can the online retail company still be good value after its mammoth rise?
Step One generated good growth in the FY24 first-half result, which was much more than the market had expected a year ago.
Earnings recap
The ASX dividend share reported 25.5% revenue growth to $45.1 million, a gross profit margin improvement from 80.7% to 81.2%, earnings before interest, tax, depreciation, and amortisation (EBITDA) growth of 35.6% to $10.1 million, and net profit after tax (NPAT) growth of 34.7% to $7.1 million.
Revenue growth in Australia was only 8.9% to $26.2 million, while the United Kingdom saw 38% revenue growth to $14.7 million, and revenue in the United States jumped 256% to $4.1 million. Amazon sales have played an important part in sales growth in the UK and US, with the platform accounting for 6.1% of HY24 revenue, up from 4.9% in the prior year.
The company advised the number of customer orders increased by 25.1%, while the average order value (AOV) increased by 4.7% to $94.47. this was driven by a "greater emphasis on upselling and volume-based promotional discounts."
It paid a dividend per share of 4 cents.
Is the Step One share price a buy?
The company is doing a number of things to try to grow in Australia, the UK and the US, while ensuring a balance between growth with profitability across all markets.
The ASX dividend share wants to grow its women's line, expand the customer funnel through partnerships with retailers and other organisations, broaden sales channels and marketplaces, expand the distribution of the women's lines to the US, invest in its capabilities and product innovation, and continue to improve the customer experience.
Based on the forecast numbers on Commsec, the Step One share price is valued at 30x FY24's estimated earnings and 27x FY25's estimated earnings.
The business will need to keep growing at a good pace to justify the current valuation, but the outlook is bright, particularly if Step One can expand in other countries such as Canada, New Zealand and so on.
