UK: New Look H1 profits jump despite sales slide
- H1 profit up 25.2% to GBP86.9m
- Sales down 1.7% to GBP710.5m
- Like-for-like sales declined 3.3%
Value fashion retailer New Look has today (20 November) seen its half-year profits rise 25.2% despite a decline in sales.
The company, which is in the third phase of its turnaround plan to drive sales, said EBITDA reached GBP86.9m (US$138m) for the first six months of the year, compared to GBP69.4m the prior year.
However group sales edged down 1.7% to GBP710.5m, while like-for-like sales declined 3.3%. UK like-for-like sales, excluding VAT, slipped 3.1%.
Gross margin improved a the company reduced its markdown and discount sales, and its international business saw a strong improvement.
Chairman Alistair McGeorge said: "These results reflect the significant progress we have made and the positive steps we have taken in our recovery plan, in spite of the continuing tough trading conditions on the high street.
"Our strategy to remove costs and drive margin improvement, which we have done by tightly managing stock levels and reducing markdowns, has successfully driven a 25% increase in H1 EBITDA."
The group achieved the first phase of its recovery plan to reduce operating costs and said its second phase to improve margin is "delivering strong results".
New Look, which operates more than 1,100 stores, said it refitted 26 stores during the quarter, with at least another 120 in the pipeline.
"Whilst we remain cautious about the economic outlook for the remainder of the financial year and the continuing squeeze on customers disposable income, we are confident that the actions we've taken to address our product, brand, stores and costs will continue to build on the growing momentum of our trading performance," McGeorge added.
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