Peak trading performance at Superdry was “lower than expected”’ as the retailer battled unprecedented levels of discounting on the high street, subdued consumer demand and shortages of bestselling product.
Group revenue dropped by 15.8% in the 10 weeks to 4 January, despite a strong Black Friday. Store sales were down by 18.5%, ecommerce by 9.3% and wholesale by 16.9%.
Superdry now expects underlying profit before tax for the full year to be in the range of £0-£10m. Analysts had previously forecast pre-tax profits of £40.5m, Reuters reported.
The retailer said that although it was “encouraged” by initial customer reaction to stock created under its new management team, this was not enough to offset weak trading on older product.
CEO Julian Dunkerton 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.”
Superdry swung to a loss before tax of £4.2m for the 26 weeks to 26 October – compared with a profit of £26.4m during the same period in 2018 – in what the retailer has labelled a “year of reset”.