Moss Bros cuts dividend, expects to report lower full year profit

Moss Bros Group PLC anticipates that the group will deliver profit at a level materially lower than current market expectations for 52-week period January 26, 2019. The company said that the change in current expectations is driven stock shortfall across all categories that has had a negative effect on sales in all retail channels and is expected to do so until late spring. The company added that hire sales continue to be challenging and the reduction in store footfall that was experienced towards the latter part of December, has continued, reflecting a more cautious consumer environment.

Commenting on the outlook, Brian Brick, the company’s Chief Executive Officer, said in a press statement: “The stock shortage has undoubtedly driven a significant shortfall in sales, which will continue until late spring. This stock shortage, has led to a disappointing start to the year and whilst we are still at a very early stage of our new financial year, the more cautious consumer environment and the effect of short term weather impacts, has led to a readjustment of our profit expectations, to protect the group’s longer term investments.”

While Moss Bros now anticipates lower full year sales as a result of the above issues, the company plans to increase investment in key areas of future growth, such as ecommerce business, product development, the customer experience and its Tailor Me proposition.

As a consequence of this revised view on FY18/19 results, and given the more challenging trading environment, the company added that the board is taking a prudent approach to capital management and has decided to modify the existing dividend policy to ensure that it is able to fully cover our future dividends with profits in FY20/21 and onwards. The board will therefore be recommending a final dividend of 1.97p, meaning a total FY dividend of 4p per share for FY17/18 compared to 5.89p for FY16/17.

Picture:Moss Bros website