Superdry warns on profits after trading falls below expectations

Gloucestershire-based fashion retailer Superdry has warned on profits for its full year 2024, saying that trading performance had been "significantly below" management expectations.

In a statement on Tuesday (December 19), the company also updated on operations, including its cost savings programme, as it issued a trading update for the 26 weeks to October 28 and current trading over the six weeks to December 10 this year.

READ MORE: Superdry to close eight retail stores

The first half was characterised by a "challenging consumer retail market" and an abnormally mild autumn, the retailer said, which had resulted in a delayed uptake of its autumn and winter collection.
Retail was down 13.1% year-on-year (YoY), while wholesale was down 41.1% YoY, the latter, in part, expected due to the company's exit of the US wholesale operation.

"The more seasonal weather seen recently in the UK and Europe, along with Superdry’s longstanding strength in outerwear, has led to a pick-up in sales," it said.

"However, despite some more encouraging trends, sales in the 6 weeks since the half-year are still down around 7% on a like-for-like basis."

Julian Dunkerton, founder and CEO of Superdry, said: "Whilst we have seen modest signs of improvement through the recent spell of colder weather, current trading has remained challenging, and this is reflected in the weaker than expected business performance.

"The operational progress we have made in the first half has been more encouraging with the IP sale for the South Asian region and strong progress on our cost efficiency programme," he added.

Superdry added that it "remains on track" with an initial £35m of cost savings expected to be realised within the year, while it continues to assess opportunities to further reduce its fixed cost base.

Its inventory reduction programme is also on track as clearance of aged stock has continued, while the firm also noted its secondary lending facility of up to £25 million with Hilco Capital Limited.

"Notwithstanding the near-term challenges faced by the group, the ongoing turnaround programme is designed to create an operating model more suited to the needs of the business over the longer-term and return Superdry to profitability," it told investors.

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