Superdry shares dropped significantly in early trade, falling as much as 33%, after the company joined a growing list of European clothing retailers in warning on profits. The brand attributes the decline to a challenging consumer retail market and mild autumn weather, both of which have negatively impacted sales of its Autumn/Winter range.
As of 0905 GMT, shares were down 15% at 35.45 pence, with a low of 28.15 pence reached shortly after the market opened.
During the 26 weeks ending October 28, Superdry reported a 13% decrease in retail sales, while wholesale experienced a decline of 41%. The significant drop in wholesale is mainly due to the company’s decision to discontinue its U.S. operation.
Recent weeks have seen a slight increase in sales due to more typical weather conditions; however, they still remain down by approximately 7% on a like-for-like basis for the six weeks ending December 10.
Superdry continues to prioritize its cost-efficiency program and expects to save an initial £35 million ($44.3 million) within the year. Additionally, the board is actively seeking further cost reductions.
“While we have observed some improvement with the recent spell of colder weather, current trading conditions remain challenging. This is reflected in our weaker-than-expected business performance,” stated Chief Executive Julian Dunkerton.
Hennes & Mauritz also reported lower-than-anticipated sales in its previous quarter, citing delayed autumn season start due to warm weather conditions. Inditex, the owner of Zara, experienced a slowdown in sales growth as well.
Superdry has not provided any forecast figures for the year. However, adjusted pretax loss, which excludes exceptional and other one-off items, is expected to reach £28.85 million compared to a loss of £21.7 million for the fiscal year ending April 29, 2023.
FactSet has compiled forecasts from two analysts, predicting revenue for the year to be £554.15 million in contrast to the previous year’s £622.5 million.
