Shares in Moss Bros Group tumbled more than 18% this morning (20 March) after the men’s wear retailer warned it expects profit for the year ending January 2019 to be at a level that is “materially lower than current market expectations”.
In its trading update for the 52 weeks to 26 January 2019, the company cited short-term stock delivery issues caused by the consolidation of its supplier base for “challenging” hire sales and a reduction in store footfall.
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While Moss Bros now anticipates lower full-year sales as a result of these issues, the business said it is important that it continues to increase its investment in key areas of future growth, which it identified as e-commerce business, product development, customer experience and the Tailor Me proposition, which “remains on plan”.
CEO Brian Brick said he expects the stock shortage – which has “undoubtedly” driven a significant shortfall in sales – to continue until late spring. He notes while it has been “painful experience”, he is confident that the availability issues are well on track to being resolved.
“This stock shortage, has led to a disappointing start to the year and whilst we are still at a very early stage of our new financial year, the more cautious consumer environment and the effect of short term weather impacts, has led to a readjustment of our profit expectations, to protect the group’s longer term investments,” he said.
“In common with many UK retailers, the year ahead looks like being a very challenging one and we have taken action early to be sure we protect the underlying strength of the business. We do believe continued investment is essential to ensure we retain a sustainable point of differentiation and that we leverage our distinct position on the high street.”
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By GlobalDataMoss Bros added it does not anticipate any change to the previously announced expectations for the results for the 52-week period ending 27 January 2018, which will be announced on 27 March as planned.
