Superdry issues profit warning for FY24

In what has appeared to be another tricky year to navigate for the British retailer, Superdry has issued a disappointing update to its FY24 trading, covering the 26-week period to October 28, 2023.

The company said that “despite progress on [its] cost savings programme and inventory reduction”, trading performance had been “significantly below management expectations”, with profits therefore expected to reflect this “weaker trading”.

While the cost efficiency strategy is on track to draw in 35 million pounds of cost savings, with further opportunities being assessed, Superdry noted that it continued to face a “challenging consumer retail market” as well as an “abnormally mild autumn”, which delayed the uptake of its AW23 collection.

As a result, retail sales fell 13.1 percent year-on-year, as stores and e-commerce were affected by the warmer weather, and latter further impacted by a profit-focused reduction in spend on digital marketing.

Wholesale drops 41.1 percent, retail falls 13.1 percent

Wholesale took a significant 41.1 percent hit YoY, which Superdry said was expected due to the decision to exit US wholesale operations, alongside underperformance in the division.

There was a pick up in sales in recent months due to the more seasonal weather in the UK and Europe, however in the six weeks since the half-year sales were still down around 7 percent on a like-for-like basis.

In a regulatory filing, Julian Dunkerton, founder and CEO of Superdry, said: “The unseasonal weather through the early autumn led to a delayed uptake of our autumn/winter range and this impacted sales in the first half of the year.

“Whilst we have seen modest signs of improvement through the recent spell of colder weather, current trading has remained challenging, and this is reflected in the weaker than expected business performance. The operational progress we have made in the first half has been more encouraging with the IP sale for the South Asian region and strong progress on our cost efficiency programme.”