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Superdry warns on profits

Superdry has warned that full-year underlying profit before tax will be lower than current market expectations following “weak” wholesale and ecommerce performance.

In a pre-close statement for the fourth quarter, the 13 weeks to 27 April, it said actions to address the underperformance were under way, and more details would be announced in its full-year results on 4 July.

Global Brand revenue at Superdry was up 3.6% for the year to 27 April to £1.7bn.

Global revenue was flat year on year, but dropped 4.5% in the final quarter.

Wholesale revenue was up 3.6% to £335m for the year, but fell 9.3% in the fourth quarter following increased levels of returns, lower than anticipated in-season orders and decisions not to ship to customers that had reached their credit limits.

Ecommerce revenue was up 1.6% year-on-year to £163.7m, but was down 3.9% in the last quarter following a reduction in discounting compared with the same time last year.

The performance of stores improved in the fourth quarter, growing 2.2%, but was down 3.7% to £373m for the year.

Following the reinstatement of co-founder Julian Dunkerton last month, Superdry is undergoing a comprehensive programme to deliver £50m-plus in gross cost savings by 2022.

Dunkerton has already increased the number of options sold online, which are generating full-price sales; repopulated selected flagship stores with a greater density of stock; and reduced unnecessary promotional activity. He will introduce 500 new products in the first six months of his tenure.

Dunkerton, who is interim chief executive, said: “There’s a lot to do, but after five weeks, I am more confident than ever that we can restore Superdry to being the design-led business with strong brand identity I know it can be. My first priority has been to stabilise the situation, and all of us in the business are putting all our energy into getting the product ranges right and improving the ecommerce proposition, which are two important steps towards addressing Superdry’s recent weak performance. The impact of the changes we are making will take time to come through in the numbers but I’m confident we are heading in the right direction.”

Peter Williams, chairman, said: “This is a fantastic British brand, and I firmly believe that with the plans Julian is putting in place it will be a great success story once again. Today’s statement shows the scale of the challenge ahead of us. The company’s financial performance won’t be turned around overnight, but we know what we need to do, and we are wasting no time in addressing the challenges the business faces. This includes ensuring the correct corporate governance structure and board is in place to guide the business going forward. I believe that we are doing the right things to get the business back on top form and delivering long-term sustainable growth for shareholders.”

Read the Drapers interview with Dunkerton here. 

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