14th Jan 2015 08:29
LONDON (Alliance News) - Shares in SuperGroup PLC, owner of the clothing brand Superdry, rose 10% Wednesday morning after the retailer said it saw a "strong performance" over the peak Christmas trading period, and is comfortable with delivering a profit for the year in the region of GBP60 million to GBP65 million.
SuperGroup has had a tough few months, and went into December with a lot of excess stock following a weaker sales performance during the "extremely mild" autumn months, which it warned last month would hit its gross margins for the full year.
In a surprise trading update Wednesday, the company said total retail sales for the 11 weeks to January 10 rose just short of 18%, while on a like-for-like basis sales grew by more than 12%, which it said was against softer comparatives than the first half. The retailer also said it embarked on more discounting over Christmas than previous years, as it needed to clear some of the excess stock it built up during the Autumn months.
The company was not due to give a trading update until next month.
"Whilst there are still 15 weeks of trading remaining in the current financial year, this performance underpins confidence in the group's expected profit outcome for the full year of GBP60 to GBP65 million despite the weakening euro and one of the group's important wholesale customers going into administration," the retailer said in a statement.
Analysts consensus is for the retailer to report an underlying pretax profit of GBP60.7 million, according to SuperGroup. In the financial year to April 2014, SuperGroup reported an underlying pretax profit of GBP62 million, stripping out exceptional costs and other one-off charges.
Bank Fashion, one of SuperGroup's major wholesale customers, went into administration at the beginning of January, just a month and a half after the loss-making fashion clothing business was sold to restructuring firm Hilco Capital Ltd.
"Bank going into administration will affect us in the second half of this year, and into next year, but we will just have to work hard to make up the sales elsewhere," Chief Executive Euan Sutherland told journalists.
SuperGroup said the cold weather from Boxing Day onwards helped prop up sales of its outerwear and knitwear, two clothing ranges that were hit by the warmer-than-normal autumn weather earlier in the year. Supergroup said it is now ahead of expectations for clearing some of the excess stock it was stuck with following weaker autumn sales and has seen a "consistent performance" across both menswear and womenswear.
"Although all channels and geographies have performed well, the performance of e-commerce was particularly notable in the run up to Christmas," the retailer said.
The group left its spring-summer wholesale season guidance at growth of 3.3% in constant currency.
SuperGroup said it will release a fourth quarter trading update on May 7, followed by its full year results on July 9.
SuperGroup shares are currently trading at 879.34 pence, up 8.4%, and one of the best-performing stocks on the FTSE 250. The stock had hit 900.00p at the open, though it is still some way off its 52-week high of 1,749.00p.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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