(Reuters) – British fashion retailer Footasylum Plc <FOOT.L> warned on Tuesday that its full-year core earnings would come in at the lower end of analysts’ estimates, hit by lower margins and likely charges from a future cost savings initiative.
Shares of the company, founded in 2005 by one of the two co-founders of JD Sports Plc <JD.L>, fell 13.9 pct to 28 pence at 0819 GMT.
The company, which sells footwear and clothes, said gross margin for the year would be lower than previously expected, as it spent more on promotions and on clearing its inventory.
Footasylum, which expects to report full-year revenue in line with estimates, said UK economic uncertainty and weakening consumer sentiment have led to some of the “most difficult trading conditions” seen in recent years.
Despite the challenges, the company’s revenue for the 18 weeks to December was 14 percent higher, boosted by strong online and wholesale sales.
“While the cuts today are disappointing we would hope that we have passed the nadir of bad news,” Liberum analysts said in a note.
(Reporting by Pushkala Aripaka in Bengaluru; Editing by Shounak Dasgupta)