UK: Investments help Moss Bros to another "strong year"
- FY pre-tax profit of GBP4.4m, up from GBP3.1m
- Group like-for-like sales grow 3.9% to GBP122.2m
- E-commerce sales jump 208.6%
Moss Bros Group has had "another strong year", analysts say, after investments in store refits and multichannel helped the men's formalwear specialist to a 42% hike in annual profit.
The UK retailer reported pre-tax profit of for the year of GBP4.4m (US$7.3m) to 25 January, up on GBP3.1m in the same period of the prior year.
Group like-for-like sales, including VAT, grew 3.9% to GBP122.2m. Like-for-like retail sales increased 6.4%, while like-for-like hire sales were down 6.4%. E-commerce sales jumped 208.6%, and now account for 5.1% of total sales.
Underlying gross margin, however, fell by 60 basis points to 59% over 59.6% last year, due in part to the lower participation of hire, which is higher margin, in the overall sales mix.
The company opened two new stores in the UK and closed five loss making ones during the year, taking its total number to 133. It is looking at a number of new store opening opportunities in the UK in the next 12 months.
"These results reflect another period of good progress for the company," said CEO Brian Brick.
"We continue to make good progress in the delivery of our strategic priorities. The modernisation of the store portfolio is achieving the anticipated returns and our plans for the implementation of a multi-channel shopping environment are on track."
During the first eight weeks of the new financial year, sales were up 7.3% and retail sales continue to show good growth. Early season bookings for wedding hire for this year have stabilised and March has see a year-on-year upturn in bookings.
However, Moss Bros added, it is too early to say if this upturn will be sustained but the business is in "excellent shape" to build market share.
Conlumino analyst Liz Faulkner said Moss Bros has had "another strong year", as investment in store refits and improving multichannel capabilities translated into like-for-like growth of 4.2%."
"Moss Bros' clear strategic vision: to refine its brand proposition, improve multichannel capabilities and modernise its store estate, while keeping a close eye on cost control - has seen it steadily turn its fortunes around," Faulkner added.
While Cantor analyst Freddie George added that the "real step up in performance" will occur now the transactional hire platform goes live and a CRM solution is implemented.
The company will in George's view be able to cross sell between its retail and hire customers, market accompanying categories and help generate repeat orders, as well as develop the business overseas.
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