Moss Bros has issued a profit warning and slashed dividends ahead of its full-year update next week after encountering stock problems.
It follows a profit warning made in January, when Moss Bros said its full-year profit is likely to fall short of market expectations after seeing disappointing footfall during December.
The retailer said its profit for the year ending 26 January 2019 will be “at a level materially lower than current market expectations”.
Shareholders will pocket 4p per share for the year 2017/18, down from 589p the previous year.
Moss Bros said it faced “material short-term issues” with stock availability after it consolidated its supplier base, in response to the weak pound.
It explained the shortfall in stock across all of its categories in turn had a “negative effect” on sales in all retail channels, which it expects will continue until late spring.
It also said hire sales “continue to be challenging”, while footfall has continued to drop in a “more cautious consumer environment”.
Moss Bros affirmed it would continue to invest in growing parts of its business, including its ecommerce business, product development, customer experiences and its bespoke tailoring service.
It also said it is “confident that the business will return to strong growth”.
CEO Brian Brick said: “The beginning of the year has been hampered by short term stock delivery issues caused by the consolidation of our supplier base. The resulting stock shortage has undoubtedly driven a significant shortfall in sales, which will continue until late spring.
“Although this has been a painful experience, I am confident the availability issues are well on track to being resolved and the margin benefits from the consolidation will flow through.
“This stock shortage, has led to a disappointing start to the year and whilst we are still at a very early stage of our new financial year, the more cautious consumer environment and the effect of short term weather impacts, has led to a readjustment of our profit expectations, to protect the group’s longer term investments.
“In common with many UK retailers, the year ahead looks like being a very challenging one and we have taken action early to be sure we protect the underlying strength of the business. We do believe continued investment is essential to ensure we retain a sustainable point of differentiation and that we leverage our distinct position on the high street.”
It will publish its results for the 52 weeks to 27 January 2018 on 27 March.