Eve Sleep shares early to rise as it continues to celebrate losses

The share price of Eve Sleep (LON: EVE) were an early riser this morning as it continued to celebrate its losses.

As shares gained by 18 percent to reach 5.2p, investors appeared to take some form of confidence in a ‘further upgrade to expectations’ following the announcement of £1.1m of sales over the Black Friday period.

This led the online mattress selling company to upgrade its revenue forecast to £24m (from at least £22m) and reduce its full-year underlying EBITDA loss to around £2.5m (a 77% year-on-year reduction).

Commenting on the performance was CEO Cheryl Calverley who issued a very bullish note and managed to squeeze in a bit of marketing:

“We have had a strong November and a remarkable performance over the Black Friday period, with sales over the four days totalling £1.1m, up 45% on the previous year. On Black Friday itself we sold a mattress on average every three minutes.  eve continues to cement its position as a premium provider of sleep wellness products and it is pleasing to see this increasingly  recognised by independent review bodies such as Which?, who’ve recognised eve’s hybrid range as the best mattresses in the UK, as well as partnerships with premium store based brands, such as Olivier Desforges in France and Dunelm and Next in the UK.

Our view – whatever happened to making a profit?

This was a golden chance for Eve Sleep that it appears to have missed with expectations of the world getting back to some form of normality in by the second half of next year.

The pandemic set it up perfectly to strongly benefit to the shift in e-commerce but it appears to have failed to do so.

Back in July it teased it was drawing ever closer to profitability ( Eve share price soars as it moves towards profit ) and since then sentiment has generally changed to celebrating its still sizeable losses while revenues have not really taken off in-line with the wider digital shift.

We’ve seen similar patterns with Eve Sleep’s share price in the run-up / aftermath of results but soon it will have to start really delivering in its numbers if it is going to mount a sustainable and long-term recovery.

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