By Radhika Anilkumar
– British fashion retailer Superdry expects only to break even this year, it warned on Friday after reporting a deeper half-year loss, with the climb down from a previous profit forecast sending its share price plunging by as much as 20%.
Its warning cited a 5.2% decline in half-year wholesale revenue because of uncertainty arising from the COVID-19 pandemic, leading an increase in its inventory of older stock.
Inflation-pinched British consumers reduced shopping spending last month by the most in at least 25 years, official data showed, dashing hopes of a Christmas boost for the country’s flagging retail sector.
However, Superdry reported sustained demand over the Christmas period as store sales caught up to pre-pandemic levels, with revenue rising 24.9% in the nine weeks to Dec. 31.
The younger crowd and its female customers spent more this Christmas season, as outerwear and women’s wear sold faster than other lines, Chief Executive Julian Dunkerton told Reuters.
“We don’t expect market conditions to become easier any time soon, but with a new financing package in place and the brand in great health, we approach the year ahead with optimism,” he said.
The retailer’s adjusted pretax half-year loss widened to 13.6 million pounds ($16.81 million) from a 2.8 million pound loss a year earlier.
Shares in the company were were down 17.4% at 123.2 pence by 1050 GMT.
“Superdry’s earnings downgrade highlights the pressures facing UK consumers with sky-high inflation and the economy teetering on the brink of a recession,” Victoria Scholar, of investment platform Interactive Investor, said in a note.
The company previously forecast adjusted annual pretax profit of between 10 million pounds and 20 million pounds.
($1 = 0.8090 pounds)