Summary of the questions and answer section at the end of the recent Warpaint London (LON:W7L) Sharesoc presentation:
The Q&A session covered a wide range of topics about Warpaint's business and strategy. Key points:
- The growth outside Denmark was across Europe, not just Denmark, as the company referred to as "Denmark" actually has about 600 shops across Europe.
- Cash balance fluctuates throughout the year as Warpaint keeps more in stock rather than sitting cash. They have facilities to manage cash flow troughs.
- Warpaint stays within the law in emulating prestige brands and has never had any lawsuits or paid damages related to infringement in 20 years.
- Most of the strong 2023 revenue growth was volume driven, not price increases. Warpaint is not seeing material cost pressure from its China suppliers currently.
- Stock turnover has improved in recent years. Warpaint monitors stock levels closely to avoid large writeoffs, and can clear excess stock through discount channels if needed.
- US growth is expected to accelerate as the brand becomes better known there, but Warpaint is focused on growing it profitably and sustainably over time.
- Getting dedicated in-store display space takes time, but retailers tend to expand Warpaint's footprint as sales volumes are proven.
- Warpaint uses Amazon for online sales in the US and Europe as it's more cost-effective than establishing its own fulfillment infrastructure in those markets.
