Supergroup surprises market with spooky profit warning

SuperGroup (SGP.L), owner of Superdry brand, has surprised the market with a lower full-year profit guidance, following the likes of Next or N Brown, just to mention but a few. The spooky notice was argued as those of its British fashion peers: the demand for its winter collection has sharply fallen due to an unusually warm autumn.

"After a strong start to the quarter, September and October have both seen an exceptional period of warm weather across the UK and the rest of Europe which is expected to continue into November," SuperGroup said in a statement.

Total retail sales in the 13 weeks to Oct. 25, its second quarter, were up 11.4 percent, including new space, but fell 4.2 percent at stores open over a year, with trading becoming much more difficult in recent weeks. In wholesale, delayed orders due to the tough conditions sent sales down 3.7 percent. However, the retail group said its growth strategy remains on track and unchanged by the short term external events being experienced.

On the wake of the spooky news and in the warmest Halloween remembered,SuperGroup´s share price plummeted Friday in early trading, shredding more than 9 percent in London.

Unseasonably warm weather ignites “uncertainty around the future performance”

The firm's surprise statement follows one on Wednesday from Next (NXT.L), Britain's No. 2 clothing retailer, which also cut its profit forecasts due to the impact of warm weather, prompting analysts to expect a highly-promotional run-in to Christmas as retailers battle to shift unwanted stock.

It is noteworthy that the so-called Indian summer is badly affecting retailers, which have not had the opportunity yet to sell their autumn ranges.

"This has resulted in a high degree of uncertainty around the future performance of the autumn/winter range, particularly outerwear... a significant part of the Superdry product mix."

That uncertainty, coupled with the high levels of sector discounting and the firm's investment programme, forced a more cautious outlook on a second half which generates 70-80 percent of the group's full-year profit, SuperGroup said.

The company now expects full-year profit to now be in the range of 60 to 65 million pounds, compared to analyst forecasts of between 69 and 73 million pounds, according to Reuters data.

 

Related news

MORE NEWS

 

LATEST JOBS

 

MOST READ