Superdry Plc - Half-Year Report
("Superdry" or "the Company")
Interim results for the 26 weeks ended 26 October 2019
Reset underway with full price stance protecting margin and brand
- Revenue decline of 11.0% reflects an expected year of reset, as we address a number of legacy issues across the business. Retail sales decline moderated through first half, with Q2 store revenue stronger than Q1 as key initiatives were implemented.
- Focus on full price sales and reducing promotional activity drove a total underlying gross margin increase of 250bps, offset by 180bp foreign exchange headwind and stock accounting changes of 80bps.
- Following an internal accounting review, we have booked charges in the period of £3.1m relating to accounting estimates for inventory and £6.9m in relation to debt recoverability. In addition a prior year, non-cash adjustment to stock of £3.9m2 has been recognised, reducing H219 profit.
- Underlying profit before tax pre-IFRS of £0.2m includes the expected benefit of £15.9m from lower depreciation and utilisation of the onerous lease provision and impact of one-off charges.
- Statutory profit before tax of £(4.2)m includes the first time adoption of IFRS16, reducing profit by £2.5m.
- Net debt position of £9.3m at the end of October 2019 reflects a strong benefit from the control of stock, which reduced by £28.9m year on year, offset by a repayment of overdue creditors brought into the year.
- Encouraging early start to Q3 peak trading with strongest online Black Friday day ever, but a substantial amount of peak trading period still to come.
- Progress in strengthening and stabilising our leadership team, securing key executives on permanent contracts, and promoting talent from within.
Julian Dunkerton, Founder and Chief Executive Officer, said:
"At this halfway point in our financial year, I am pleased with the progress we have made to comprehensively reset Superdry. We're doing this through our product and brand, our physical and digital retail operations and a renewed focus on the retailing basics. We are only eight months into a process that will take two to three years, but I have great confidence in the strength of our new executive leadership team. I am also pleased with the trajectory of performance we have seen from Q1 to Q2 and subsequently into our peak trading period, which gave us our biggest online trading day ever. However, we remain cautious about the challenging market conditions over the peak trading period".