• Underlying pre-tax profit jumps 54.4%
  • Group revenue up 22.3% to GBP254.7m
  • Analysts says company "well-placed" to deliver on longer-term growth plans
SuperGroup has lifted its full-year gross margin target

SuperGroup has lifted its full-year gross margin target

SuperGroup is "well-placed" to deliver on its longer-term growth plans, according to one analyst, after the Superdry brand owner raised its full-year gross margin guidance and booked a 54.4% increase in first-half pre-tax profit. 

Underlying pre-tax profit reached GBP19.3m (US$29m) for the 26 weeks ended 24 October, compared to GBP12.5m in the same period of the prior year. 

Group revenue increased 22.3% to GBP254.7m from GBP208.2m a year ago. Retail revenue jumped 30.8% to GBP172.1m from GBP131.6m last year, with like-for-like sales up 17.2% year-on-year. Wholesale revenue rose 7.8% to GBP82.6m from GBP76.6m. 

Underlying group gross margin increased 110 basis points to 60.1% from 59% a year ago. 

The company's North America division, however, posted an operating loss of GBP2.4m, due to the "seasonality of the business", and the "greater elapsed time to fully reset the customer proposition" after the buyout of the North American licence in March. 

"SuperGroup has made good progress in realising its strategic objectives in the first half and has delivered profitable growth, while continuing to invest in the business," said CEO Euan Sutherland. "Central to this is the ongoing process to get ever closer to our customers who clearly appreciate the product innovation that is widening the Superdry offer."

The company now expects gross margin to grow 40-60 basis points, up from its earlier guidance of flat to 30 basis points.

However, SuperGroup predicts its North America business will report a loss of GBP3-3.5m in fiscal 2016 and post a "small loss" the year after, compared to its earlier forecasts for a GBP2.5m loss and to break-even respectively. 

Investec analyst Kate Calvert described the results as "strong", and viewed the updated margin guidance as "a reassuring indicator on current trading." 

She added: "Strategic objectives remain on track with SuperGroup well-placed to deliver on its longer-term growth ambitions."