Superdry is latest UK retailer to feel the sales heat
Retailer Superdry has joined a growing list of UK fashion shops hit by unseasonably hot weather and other woes, as the company warned that full-year profit would fall short of market expectations, hammering its shares.
Superdry shares, already down 47% so far this year due to declining store sales, fell 20%, valuing the retailer at £674m (€766m).
The company also said foreign exchange hedging mechanisms had not provided the protection expected, leading to around £8m in additional costs.
The group is five months into an 18-month product diversification programme aimed at reducing its reliance on heavier weight products, such as jackets and sweatshirts.
It plans to sell more dresses, skirts, women’s tops, and denim, as well as expand into premium, sports and licensed goods.
However, the unusually warm summer and autumn across Europe and the US has hit the sales of many clothing retailers.
Last week shares in rival Ted Baker tanked 14% after it warned of a tough remainder of the year, and Moss Bros last month warned that full-year profit would take a substantial hit.
Even online sellers have been burned by the high temperatures with Zalando, Europe’s biggest online fashion-only retailer, last month cutting its 2018 outlook for the second time in as many months.
Superdry said the continuation of warm conditions through September and into the first half of October had significantly affected demand for its autumn and winter range, particularly sweatshirts and jackets which account for around 45% of its annual sales.
The weather conditions, combined with challenges facing some of the trading partners Superdry supplies, were expected to adversely impact 2018 to 2019 profits by around £10m, it said.
“Superdry is a strong brand with significant growth opportunities but we are not immune to the challenges presented by this extraordinary period of unseasonably hot weather,” said chief executive Euan Sutherland.
Prior to Monday’s update analysts’ average forecast for 2018 to 2019 pretax profit was £109.5m, up from the £97m a year earlier.
