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Store slowdown dampens Superdry revenue growth

Superdry has announced a 5.4% rise in global brand revenue for the 13 weeks to 26 January 2019. 

However, total group revenue dropped 1.5% year on year to £269.3m as store and ecommerce sales flagged.

Brand growth was driven by a 12.7% rise in wholesale revenue, which was £73.5m for the quarter.

This rise failed to offset the 8.5% drop in store revenues, which fell to £126.8m and a 0.7% decline in ecommerce sales to £69m.

Superdry blamed the figures on “ongoing legacy product issues” and unseasonably warm weather. Ecommerce sales were impacted by a lower amount of discounting on Superdry’s own sites.

Commenting on the results, Superdry chief executive Euan Sutherland said: “Superdry’s performance has remained subdued during quarter three. We continued to be impacted by the ongoing product mix and relevance issues we have previously highlighted and by the lack, until the end of quarter three and the start of quarter four, of any prolonged period of cold weather in our key markets.”

In December, Superdry announced plans to step up its transformation programme in a bid to revive the brand’s fortunes. Underlying profits were down 49% to £12.9m for the 26 weeks to 27 October 2018.

Superdry’s transformation programme includes an 18-month innovation and diversification programme on product, including the launch of licensing and childrenswear early next year.

A review of Superdry’s store portfolio is also set to be completed by March 2019.

Last month, Superdry announced that former Nike executive Phil Dickinson will join Superdry as creative director on 22 January. Dickinson will be in charge of product design and “driving the wider creative direction of the brand”.

John Stevenson, analyst at Peel Hunt, said the popularity of ranges with wholesale customers is a silver-lining: “Autumn ranges suffered from a lack of innovation and warm weather, the latter exacerbated by having a product file that is skewed heavily towards thick winter product. The carrot for investors is a range revamp that starts to land with real innovation from autumn 19 on forecasts that have been decimated as the 18 weather downgrades have been passed forward. Short term, however, there are few catalysts for trading, rather the best we can look for is details around how well new lines have resonated with wholesale partners.”

 

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