Superdry has swung to a loss before tax of £4.2m for the 26 weeks to 26 October, from a profit of £26.4m during the same period in 2018, in a ”year of reset” for the business.
The loss includes the first time adoption of new property leasing standard IFRS 16, which reduced profit by £2.5m.
Underlying profit before tax pre-IFRS 16 was £200,000 and included the expected benefit of £15.9m from lower depreciation and utilisation of the onerous lease provision and impact of one-off charges. This compares to an underlying profit before tax of £12.9m for the same period in 2018.
Meanwhile, group revenue at Superdry fell by 11% to £369.1m, from £414.6m in the half-year to October 2018.
Net debt totalled £9.3m in the same period, compared to a positive net cash position of £19.2m in 2018.
The business said a focus on full price sales drove a total underlying gross margin increase of 250 basis points, which was offset by foreign exchange headwinds and stock accounting changes.
“At this halfway point in our financial year, I am pleased with the progress we have made to comprehensively reset Superdry”, Julian Dunkerton, founder and chief executive of Superdry, said.
“We’re doing this through our product and brand, our physical and digital retail operations and a renewed focus on the retailing basics. We are only eight months into a process that will take two to three years, but I have great confidence in the strength of our new executive leadership team. I am also pleased with the trajectory of performance we have seen from Q1 to Q2 and subsequently into our peak trading period, which gave us our biggest online trading day ever. However, we remain cautious about the challenging market conditions over the peak trading period”.