Footasylum shares drop on profit warning

Footasylum has experienced a drop in shares after a full-year profit warning, despite reporting a 18.5 percent rise in sales to 98.6 million pounds for the six months to 25 August.

The UK retailer said it now expects full-year underlying earnings to fall at the lower end of its forecasts, following steep discounting over the festive season. The company also said that “UK economic uncertainty and weakening consumer sentiment” contributed to “some of the most difficult trading conditions seen in recent years.”

The streetwear and sportswear retailer's shares dropped by 9 percent following the profit warning, having initially plunged by as much as 26 percent on opening. Discounting efforts did, however, keep revenues on track for the full year, with the retailer reporting a 14 percent rise in total sales over the 18 weeks to December 29 - online up 28 percent and stores up 5 percent.

Commenting in a statement, Barry Bown, executive chairman of Footasylum, said: “The short-term outlook is undeniably challenging, and we continue to maintain our focus on cash, working capital and inventory management, as well as reducing costs across our operations.

“The current trading conditions have led to significant discounting and promotional activity across the sector, and this in turn has impacted our gross margin expectations for FY19."

Photo credit: Footasylum, Facebook