11th Jan 2019 08:43
LONDON (Alliance News) - Quiz PLC on Friday said annual revenue and adjusted earnings will be below expectations due to lower than expected Christmas sales and increased discounting activity.
Shares in the company were trading down 24% at 27.13 pence each early Friday morning on the back of the warning.
For the six weeks to January 5, the fashion retailer saw revenue up 8.4% against the same period a year ago. This was mainly due to a strong performance of its Online arm, up 34% in the period, with the firm's own website registering a 51% revenue increase.
The group's UK standalone Stores and Concessions revenue increased by 1.6% during the festive period.
Quiz, however, was expecting to post higher sales in the crucial Christmas season. The retailer said it now expects its revenue for the year ending March 31 to be below market expectations of GBP133.0 million. A year ago, Quiz's revenue was GBP116.4 million.
"The group had previously indicated that its financial results would be largely dependent on trading during the key Christmas period. As has been widely reported, the retail trading environment has been challenging over recent months, particularly in November," Quiz said.
It added: "Whilst the group's sales patterns improved as the Christmas trading period progressed, overall sales for the period were below expectations. Given the continued uncertainty with regards to consumer demand and associated spend, we believe it is prudent to revise our revenue forecasts for the remainder of the year to reflect recent trading patterns."
Earnings before interest, taxes, depreciation and amortisation are expected in the region of GBP8.2 million for the year, excluding a GBP400,000 charge related to the collapse of department store chain House of Fraser in which Quiz operated some concessions. Last year, Quiz posted Ebitda of GBP11.5 million.
The retailer also expects margins to reduce to 60.5% on the back of higher promotional activity and discounting. At September margins were 62%.
Similarly to Quiz, FTSE 100 fashion, home and general merchandise retailer Next PLC also reported a sales increase over the Christmas season but cut its guidance on the back of uncertainty in the retail market.
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