Gymshark profits decline for first time as operational costs rise

The sportswear retailer posted a 39% fall in profit before tax to  £27.8m despite 21% sales growth to £484m.

In the same period, gross profit increased to £315.1m, compared to £282.8m in 2021. Operating profit fell to £29.5m from £46.5m in 2021.

Net profit for the financial year fell to £22.5m from £36.4m in the previous year.

A Gymshark spokesperson said: “All countries where the company trades were affected by the Covid-19 pandemic and the relaxation of societal restrictions have impacted the consumer and businesses alike. Apparel businesses have been hit by rising input costs in their supply chains, whether from rising raw materials, fuel and labour costs, or increased freight and logistics costs.

“The consumer has had more opportunities to apply discretionary spending to entertainment and travel, but inflation and rising costs also affect spending. So, yes, there have been challenges, and it would have been tempting to hold on to the money in the bank.

“However, unlike so many, we refused to be swayed by macroeconomic conditions and so doubled down on investment, whether in the international markets or in opening our first-ever permanent flagship store on Regent Street, which is now outperforming our forecasts and setting us up for further growth in the UK. Our decision to invest when we did is now paying off globally, as we are seeing double-digit growth in our revenue and trading in line with our group forecast.”