UK: City optimistic despite Moss Bros H1 profit fall
- H1 pre-tax profit down 12.4% to GBP
- Revenues rise 4.6% to GBP55.8m
- Like-for-like sales grow 6.4%
Moss Bros saw its first-half revenues rise 4.6%
Analysts remain optimistic for "modest growth" from men's formal wear specialist Moss Bros in the second half, despite recording a drop in first-half pre-tax profit.
Pre-tax profit amounted to GBP2m (US$3.3m) for the 26 weeks to 26 July, compared to GBP2.2m in the same period of last year. The company attributed the decline to the higher number of stores that were closed for refits, compared to a year ago.
Revenues, however, were up 4.6% to GBP55.8m from GBP53.3m in the prior year, and like-for-like sales grew 6.4%. Like-for-like retail sales increased 8.5%, including e-commerce sales up 100%.
Like-for-like hire sales, meanwhile, dropped 2.7% year-on-year.
Gross margin was 0.6% lower at 59.1%, down from 59.7% in the prior year, reflecting the reduced participation of hire in the overall sales mix.
The group introduced a number of sub-brands during the first half, including Moss London, Moss 1851, and Moss Esquire, allowing it to target different consumer segments at various price points.
"These results reflect another period of progress for the company," said CEO Brian Brick. "We continue to invest in the future and make good progress in delivering our strategy."
Moss Bros said trading in the seven weeks to 13 September has been "encouraging", with like for like sales up 6%. Hire is well prepared for the peak evening wear season, it added.
Conlumino analyst Neil Saunders said: "Overall, Moss Bros is a business with a good strategic direction that is delivering results on a number of fronts.
"Most encouragingly, its development appreciates the need to be multichannel; so while online is generating good sales uplifts, the stores - which are vital for the hire business and for suit fitting - are also a key part of its forward strategy."
He added that some "modest growth" will come through in the second half, which includes the important Christmas trading period.
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