After lower than anticipated Christmas sales embattled clothing retailer Superdry now expects its underlying pretax profit for its financial year to range from £0-£10m.
The firm said it struggled to hit its expected retails sales of £23m because of “subdued” consumer demand in the Christmas sales and “unprecedented levels of promotional activity” on the high street over the period.
In addition, shortages of its better selling product, due to its need to reduce its inventory, adversely affected sales, Superdry said in its trading update for the 10 weeks to 4 January 2019.
However, the firm said it was “encouraged” by customer responses to the new limited autumn/winter 2019 stock and that it expects to partially offset the further £5m sales shortfall since Black Friday during the remainder of its current financial year.
Store revenue during the Christmas trading period fell by 18.5% and online revenue dropped by 9.3%.
Julian Dunkerton, chief executive of Superdry, said: “Everyone at Superdry continues to work intensively to deliver the turnaround of the business. While we have always said it will take time, we continue to make progress in implementing our strategy.
“A key element of this is to focus on and return to full-price sales and reduce promotional activity, and we halved the proportion of discounted sales over our peak trading period, benefiting both our margins and the Superdry brand.
“However, this adversely affected our sales during the peak trading period given the level of promotional activity in the market. Despite this, our disciplined plan to reinvigorate the brand and return Superdry to sustainable long-term growth is on track.”
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