Superdry Plc - Trading Statement
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("Superdry" or "the Company")
10 January 2020
Trading update and full year outlook
Superdry announces today a trading update covering the 10 week period from 27 October 2019 to 4 January 2020 ("peak trading period").
Despite a strong Black Friday event, peak trading performance has been lower than expected as we continue our strategic transition to a full price stance.
Over this period the high street has seen unprecedented levels of promotional activity coupled with subdued consumer demand immediately after Christmas. These factors, combined with shortages of some better-selling product, driven by the need to reduce our inherited inventory position, adversely impacted our sales during peak trading.
We have been encouraged by initial customer reaction to the limited amounts of the new management team's Autumn/Winter 2019 stock. However, this has not been sufficient to offset weaker trading on older product.
In aggregate these factors have led to lower than anticipated retail sales of £23m since Black Friday, predominantly online. Whilst we are encouraged by response to the limited ranges that we have introduced, this challenge will remain until the new design philosophy and product can be fully implemented across the entire range, with full impact expected by the launch of Autumn/Winter 2020.
Our Wholesale performance has been impacted by certain timing issues during the quarter. While this shows a further £5m sales shortfall since Black Friday, we expect this to partially reverse during the balance of the financial year.
The benefit of strong gross margins and cost initiatives will not fully offset the profit impact of the aggregate shortfall in sales. Taking into account our revised sales expectations for the balance of the financial year, and the challenging trading environment in which we are operating, we now expect Underlying PBT(1) to be in the range of £nil - 10m.
Julian Dunkerton, Chief Executive Officer, said:
"Everyone at Superdry continues to work intensively to deliver the turnaround of the business. While we have always said it will take time, we continue to make progress in implementing our strategy. A key element of this is to focus on and return to full price sales and reduce promotional activity, and we halved the proportion of discounted sales over our peak trading period, benefitting both our margins and the Superdry brand. However this adversely affected our sales during the peak trading period given the level of promotional activity in the market. Despite this, our disciplined plan to reinvigorate the brand and return Superdry to sustainable long-term growth is on track."