Superdry brand owner SuperGroup has credited its “disruptive multi-channel approach” with booking 20% growth in sales and profit for the half year to the end of October 2017, a period in which the company also established an Asian buying office to further drive direct sourcing.
For the 26 weeks, underlying profit before income tax was up 20.5% to GBP25.3m (US$34.1m) from GBP21m a year earlier.
Group revenues rose 20.4% from GBP334m to GBP402m, including a GBP12m benefit from foreign exchange; while global brand revenue surged 25.2% to GBP756.3m.
Wholesale revenue meanwhile, climbed 34.1% to GBP159.3m from GBP118.8m, while retail revenue was up 12.8% to GBP242.7m, including like-for-like growth of 6.3%. E-commerce revenue growth was 31.6% compared to 21.6% in the year-ago period, while store revenue came in at GBP181.5m, up 7.6% year-on-year.
Group gross margin narrowed slightly to 57.1% from 58.8%, reflecting announced investment to reduce inventory levels and sales mix to the wholesale channel.
Direct sourcing has increased by over 30% since 2015, with the long-term intention of 80% of product based on direct relationships with factories “still on track”.
The group also benefited from global infrastructure development during the period, with a focus on increasing supply chain flexibility and efficiency. This includes the introduction of fast response capability for about 30% of options and the adoption of proven technology.
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By GlobalDataThe company has also extended multi-channel capability to its European distribution centre and implemented a new Order Management System (OMS) for e-commerce.
Direct sourcing has increased by over 30% since 2015, with the long-term intention of 80% of product based on direct relationships with factories “still on track.”
The latest development here is a buying office in Hong Kong to further drive direct sourcing – a move that means the company now has dedicated in-market sourcing and quality resource in each of its three key production territories.
Meanwhile, the greater harmonisation of retail and wholesale ranges provides a “significant opportunity” to leverage value throughout the supply chain from lower cost prices from a more concentrated buy, logistics improvements and enhanced sell-through rates. “We remain on track to double the level of range consistency over the next 18 months,” says SuperGroup.
Other highlights during the period include progress towards Super Responsible 40, Superdry’s stretching corporate responsibility goals, which were outlined in September of last year and are due to be delivered by 2040.
Meanwhile, in the ten weeks to 6 January, SuperGroup said global brand revenue was up 13.6% to GBP314.4m year-on-year, while group revenue of GBP215.6m was 12.6% higher than the prior year, including an approximate 0.5% benefit from foreign exchange. Group retail like-for-like sales were up 4.7%, while e-commerce revenues increased by 30.5%.
“Superdry has further strengthened its position as a global digital brand obsessed with quality and design,” said CEO Ethan Sutherland. “We have delivered another strong performance demonstrating the unique advantages and attractiveness of Superdry and its relevance to customers around the globe. Our growth through our eight channels to market has further diversified the brand, both geographically and across channels, while continued innovation has further widened our product offer.”
Sutherland added having traded through its peak trading period, the board remains confident in delivering full year underlying profit before income tax “in line with the range of analyst expectations and in the quality of the sustainable financial performance we can deliver.”
Eleanor Parr, retail analyst at GlobalData, notes sales over the peak trading season were impressive, and were again uplifted by e-commerce revenues, which grew 30.5%. Although, she adds as the retailer fails to mention profits during this period, it is likely that these will be diluted as Superdry offered significant discounts during Black Friday and on some products in the run up to Christmas.
“Although it may have felt pressure to partake in these sales to drive revenue and compete with other players, excessive discounting could damage its reputation as a premium player and encourage shoppers to purchase goods they would otherwise have bought at full price,” she notes.
