27th Jan 2023 08:21
(Alliance News) - Superdry PLC on Friday said it swung to an interim loss, after underperformance by its Wholesale segment which has continued to blight the business post-period end.
Shares in the Cheltenham, England-base firm plunged 18% to 122.00 pence in early morning trade in London. The stock is down 44% over the past 12 months.
In the six months ended October 29, the clothing retailer swung to a pretax loss of GBP17.7 million from a profit of GBP4.0 million the previous year.
Revenue in the half inched up by 3.6% to GBP287.2 million from GBP277.2 million. This was largely driven by a strong performance in its owned stores, Superdry explained.
Store revenue grew 14% against the previous year as the company saw traffic shift back to physical retail and a normalisation in online revenue. E-commerce revenue still grew by 1.6% year-on-year, however.
Meanwhile, Wholesale revenue declined by 5.2% against the previous year, due to a lagged recovery after Covid and shipment timings. Superdry said this underperformance hurt interim profit.
Founder & Chief Executive Julian Dunkerton said: "Despite the underlying brand recovery, our profits in the first half fell short of expectations mainly due to the underperformance of Wholesale. We reorganised our team and our approach to support our Wholesale partners and expect to see their confidence return following the retail success of [the autumn/winter 2022 fashion season].
"Whilst we did trade well through November and December, the outlook for the remainder of the year is uncertain and as a result, we are moderating our profit outlook to broadly breakeven."
Superdry said it now expects its adjusted pretax profit for financial 2023 to be broadly breakeven. Previously, the firm had expected adjusted pretax profit between GBP10 million to GBP20 million.
"We don't expect market conditions to become easier any time soon, but with a new financing package in place and the brand in great health, we approach the year ahead with optimism," Dunkerton added.
In the nine-weeks ended December 31, overall revenue was up 4.5% against the previous year as physical store trading continued to recover. However, the Wholesale business continued to prove challenging for Superdry, with revenue down 18% in the year-to-date.
As a result of this weakness in wholesale sales, Superdry's gross margin for the nine-week period is down 60 basis points against the prior year.
By Heather Rydings, Alliance News senior economics reporter
Comments and questions to [email protected]
Copyright 2023 Alliance News Ltd. All Rights Reserved.