• Q4 sales up 3.6% as trading momentum recovers
  • FY sales flat after tough autumn
  • Expects FY profit below expectations

Online, catalogue and stores retailer N Brown expects full-year profit to fall below expectations despite a revenue recovery in the fourth quarter.

Updating for the three months to 28 February, the company said gross margin had been impacted by tactical and strategic price investments in the fourth quarter.

However, sales had risen 3.6% and product volume rose 11%, with key brands JD Williams, Jacamo and Simply Be performing strongly.

“We are very encouraged by the momentum seen during Q4, both in terms of trading and strategic progress,” said CEO Angela Spindler.

“Combined with our continued product improvements, during the period we decided to invest more in price; this proved successful, with product volumes returning to double-digit positive growth for the first time in many years.”

However, N Brown said full-year profit was likely to fall short of the market consensus figure of GBP88m – described by Spindler as a “disappointment”, but one caused by “taking the right decisions now”.

This view was echoed by Anusha Couttigane, senior consultant at retail analyst Conlumino, who said: “A new pricing strategy, increased warehouse capacity and a revision of its brand portfolio will, in the long term, ensure the sustainability of the business.”

Meanwhile, Shore Capital’s Darren Shirley said he had no doubt shareholders would be concerned and frustrated by the profit news, but added: “We believe management is doing the right things to position the business fundamentally better for the future in our view.”