SuperGroup cuts profit outlook on warmer weather
- Q2 retail sales up 11.4%
- Like-for-like sales drop 4.2%
- Group sales up 4.5%
SuperGroup saw warmer autumn weather hit sales in Q2
Superdry brand owner SuperGroup is offering a cautious outlook for the remainder of the year, cutting its profit guidance, as warmer autumn weather hit sales in the second quarter.
Total retail sales in the three weeks ended 25 October were up 11.4% on the year, reflecting the ongoing investment in new space. Like-for-like sales, however, dropped 4.2%, with trading becoming more difficult in recent weeks.
"As widely reported by other retailers in the apparel sector, 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. "This has resulted in a high degree of uncertainty around the future performance of the autumn/winter range, particularly outerwear which is a significant part of the Superdry product mix."
As a result, the group as adopted a more cautious view on its full year outcome and now expects profit to be in the range of GBP60-65m (US$96.1-104.1m), below Reuters analyst forecasts of GBP69-73m.
The company blamed the level of sector discounting and continuing weather related uncertainty, together with planned strategic investment in its cost base, for the revision.
Nonetheless, it added: "As the group enters its peak trading quarter, Superdry stores are well-prepared and the group's growth strategy remains on track and unchanged by the short term external events being experienced. The group continues to make progress internationalising the business and developing the brand globally."
Group sales in the period were up 4.5% to GBP122.3m, while wholesale revenues dropped 3.7% to GBP51.3%.
Cantor analyst Freddie George also offered a note of caution: "For H2/FY15, we are concerned that the company, which now does not have any material gaps in the categories, will not have any ‘mega sellers’ in Q3 as in previous years and will be impacted by a more discount driven market ahead of Christmas in response to the milder weather. In the meantime, we expect central overheads to have increased significantly."
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