Superdry lowers FY profit outlook as H1 wholesale underperforms

Superdry has lowered its profit outlook for the full year due to its wholesale segment underperforming in the first half and “increasing uncertainty on Q4”.

The British fashion retailer now expects to broadly break even for the year compared to its previous guidance of an adjusted pre-tax profit of between 10 million pounds and 20 million pounds.

That came as the company’s adjusted pre-tax loss for the six months to October 29 widened to 13.6 million pounds from 2.8 million pounds a year earlier.

Group revenue increased 3.6 percent to 287.2 million pounds, with store revenue up 14.3 percent as shoppers flocked back to physical stores.

But the company was impacted by a 5.2 percent drop in wholesale sales “due to a lagged recovery after Covid and shipment timing”.

Superdry said there was a particularly strong demand for womenswear, denim, and jackets in the six-month period.

Remaining upbeat, the company said its brand recovery is “on track, with strong momentum for AW21 collection and new leading categories”.

Christmas trading

In the important Christmas trading period - the nine weeks to December 31 - group revenue increased 4.5 percent year-on-year, with retail revenue jumping 24.9 percent, returning to pre-pandemic levels.

Founder and CEO Julian Dunkerton told investors: “The Superdry brand has real momentum and I’m delighted by how our retail trading continues to strengthen. We’ve done this against a difficult macroeconomic backdrop by delivering well-designed, affordable, and responsibly sourced products which have resonated well with customers.”

But he added: “Despite the underlying brand recovery, our profits in the first half fell short of expectations mainly due to the underperformance of wholesale. We reorganised our team and our approach to support our wholesale partners and expect to see their confidence return following the retail success of AW22.

“Whilst we did trade well through November and December, the outlook for the remainder of the year is uncertain and as a result, we are moderating our profit outlook to broadly breakeven. We don’t expect market conditions to become easier any time soon, but with a new financing package in place and the brand in great health, we approach the year ahead with optimism.”